Question 15 1 pts A manufacturing company applies overhead based on direct labor
ID: 2335810 • Letter: Q
Question
Question 15 1 pts A manufacturing company applies overhead based on direct labor hours. The following information has been provided: Estimated Overhead Costs: $720,000 Estimated Direct labor hours: 90,000 Actual Overhead costs:$754,400 Actual Direct labor hours:92,000 Compute the predetermined overhead rate per direct labor hour. O $8.38 O $8.20 $8.00 O $7.83 Question 16 1 pts Using the information in the above question, the entry to assign overhead costs during the year would include a O debit to Overhead for $720.000 credit to credit to Overhead fors debit to overtead for for $736.000 5754400Explanation / Answer
(15)
Pre determined overhead rate = Estimated overhead cost/Estimated direct labor hours
= 720,000/90,000
= $8
Hence, correct option is (c)
(16)
Pre determined overhead rate = $8 per direct labor hour
Actual direct labor hours = 92,000
Applied overhead cost = Pre determined overhead rate x Actual direct labor hours
= 8 x 92,000
= $736,000
Hence, the entry to assign overhead costs during the year would include credit to overhead for $736,000.
Hence, correct option is (b)
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