Here are selected data for Wilson Company: Estimated manufacturing overhead $ 247 comma 760$247,760 Factory utilities $30,200 Estimated labor hours 35,000 Indirect labor $22,400 Actual direct labor hours 36,000 Sales commissions $53,700 Estimated direct labor cost $ 326 comma 000$326,000 Factory rent $47,700 Actual direct labor cost $ 320 comma 400$320,400 Factory property taxes $28,100 Factory depreciation $65,400 Indirect materials $33,000 If the company allocates manufacturing overhead based on direct labor cost, what are the allocated manufacturing overhead costs

Allocated overhead = $254,880

Explanation:

Giving the following information:

Estimated manufacturing overhead $247,760

Factory utilities $30,200

Estimated labor hours 35,000

Indirect labor $22,400

Actual direct labor hours 36,000

Sales commissions $53,700

Estimated direct labor cost $326,000

Factory rent $47,700

Actual direct labor cost $ 320400

Factory property taxes $28,100

Factory depreciation $65,400

Indirect materials $33,000

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 = 247760/35000 = $7.08 per direct labor hour

Now, we can determine the allocated overhead

Allocated overhead = manufacturing overhead rate * actual hours = 7.08*36000 = $254,880