Sinclair Company manufactures a line of lightweight running shoes. CEO Andrew Si
ID: 2415466 • Letter: S
Question
Sinclair Company manufactures a line of lightweight running shoes. CEO Andrew Sinclair estimated that the company would incur $3,046,530 in manufacturing overhead during the coming year. Sinclair Company uses direct labor hours as its manufacturing overhead application base, predetermined overhead rate is $12.91/DLH and when it uses machine hours as its manufacturing overhead application base, predetermined overhead rate is $5.87/MH. Additionally, he estimated the company would operate at a level requiring 235,982 direct labor hours and 519,000 machine hours. At the end of the year, Sinclair Company had worked 210,000 direct labor hours, used 357,000 machine hours, and incurred $2,527,000 in manufacturing overhead.
Explanation / Answer
Answer:
No. of direct labor hours worked by end of the year X predetermined overhead rate
210,000 * $12.91= $27,11,100