Before the year began, Murphy manufacturing estimated that manufacturing overhead for the year would be $175,000 and 13,000 direct labor hours would be worked. Actual results for the year included the following:Actual MOH cost $184,000Actual DL hours 14,500the amount of manufacturing overhead allocated for the year based on direct labor hours would have been: (a) $184,000 (b) $195,750 (c) $175,500 (d) $179,750

The correct answer is B: $195,750

Explanation:

Giving the following information:

Manufacturing overhead for the year would be $175,000 and 13,000 direct labor hours would be worked.

Actual results for the year included the following:

Actual MOH cost $184,000

Actual DL hours 14,500

First, we need to calculate the manufacturing overhead rate:

manufacturing overhead rate = total estimated manufacturing overhead for the period / total amount of allocation base

manufacturing overhead rate = 175000/13000 = 13.5

Now, we can calculate the amount of manufactured overhead allocated:

Manufactured overhead allocated = overhead rate * actual direct labor hours

Manufactured overhead allocated = 13.5*14500 = $195,750