Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $244,200 and 9,200 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $245,000 and actual direct labor-hours were 6,100. The overhead for the year was: (Round your intermediate calculations to 2 decimal places.)

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Business

Jocelyn Cameron

25 October, 09:23

Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $244,200 and 9,200 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $245,000 and actual direct labor-hours were 6,100. The overhead for the year was: (Round your intermediate calculations to 2 decimal places.)

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Paulina Myers · Answer 1

The overhead for the year will be $245,000

Applied overheads in the year are $161,894 and Underapplied overheads are $83,106 total charged to cost of goods sold will be $245,000

Explanation:

Predetermined overhead rate = total estimated overhead / estimated direct labor-hours

Predetermined overhead rate = 244,200 / 9,200

Predetermined overhead rate = 26.54 per labor hour

Overhead for the year = Predetermined overhead rate X Actual Direct Labor hours

Overhead for the year = 26.54 x 6100

Overhead for the year = 161,894.00

Underapplied overheads = 245,000 - 161,894 = 83,106.00