EB3.

LO 6.1A company estimated 50,000 direct labor hours and $450,000 in overhead. The actual overhead was $445,000, and there were 50,500 direct labor hours. What is the predetermined overhead rate, and how much was applied during the year?

Question

Business

Rachael Parks

25 January, 14:21

EB3.

LO 6.1A company estimated 50,000 direct labor hours and $450,000 in overhead. The actual overhead was $445,000, and there were 50,500 direct labor hours. What is the predetermined overhead rate, and how much was applied during the year?

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Answers (1)

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Beatrice Henson · Answer 1

Predetermined overhead rate=$9

Applier overhead=$454,500

Explanation:

The predetermined overhead rate shall be determined on the basis of the estimated labour hours and shall be calculated using the following formula:

Predetermined overhead rate=estimated overhead cost/estimated hours

=450,000/50,000

=$9 per hour

Applier overhead=Predetermined overhead rate*Direct labour hours

=9*50,500

=$454,500

EB3.LO 6.1A company estimated 50,000 direct labor hours and $450,000 in overhead. The actual overhead was $445,000, and there were 50,500 direct labor hours. What is the predetermined overhead rate, and how much was applied during the year?

EB3.

LO 6.1A company estimated 50,000 direct labor hours and $450,000 in overhead. The actual overhead was $445,000, and there were 50,500 direct labor hours. What is the predetermined overhead rate, and how much was applied during the year?