Clarrin, Inc. has estimated the following operating data for the current year: D
ID: 2538124 • Letter: C
Question
Clarrin, Inc. has estimated the following operating data for the current year:
Direct labor hours: 12000
Machine hours: 14000
Direct materials cost: $51000
Manufacturing overhead: $143000
Assume that Clarrin, Inc. computes a predetermined overhead rate annually based on direct labor hours. During January of the current year, Clarrin, Inc. works on 2 products, and accumulated the following actual operating data by product:
Actual manufacturing overhead for January is $9295.
a. What is the predetermined overhead rate (per direct labor hour) that Clarrin, Inc. will use in the current year? Round the rate to the nearest penny for your answer.
b. How much total overhead will Clarrin, Inc. apply to inventory in January?
Round your answer to the nearest dollar.
c. What is the overhead variance for January?
Explanation / Answer
Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Manufacturing overhead 143,000.00 Direct Labour Hours 12,000.00 predetermined overhead rate = 143000/12000 11.92 b) Actual Labour hours 1,020.00 Overhead applied to inventory= 1020*11.92 12,155.00 c) overhead variance = 12155-9295 2,860.00