Ask Question
21 June, 22:28

Mesa Corp. allocates overhead to production on the basis of direct labor costs. Mesa's total estimated overhead is $450,000 and estimated direct labor is $180,000. Determine the amount of overhead applied to a job which used $20,000 of direct labor.

+4
Answers (1)
  1. 22 June, 00:24
    0
    Allocated MOH = $50,000

    Explanation:

    Giving the following information:

    Mesa's total estimated overhead is $450,000 and estimated direct labor is $180,000. Determine the amount of overhead applied to a job which used $20,000 of direct labor

    First, we need to calculate the predetermined overhead rate:

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

    Predetermined manufacturing overhead rate = 450,000/180,000

    Predetermined manufacturing overhead rate = $2.5 per direct labor dollar

    Now, we can allocate overhead:

    Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

    Allocated MOH = 2.5*20,000

    Allocated MOH = $50,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Mesa Corp. allocates overhead to production on the basis of direct labor costs. Mesa's total estimated overhead is $450,000 and estimated ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers