Question

Erik's Florist Gump Company based in New york applies manufacturing overhead on the basis of direct...

Erik's Florist Gump Company based in New york applies manufacturing overhead on the basis of direct labor-hours. At the beginning of 2019, the company based its predetermined overhead rate on total estimated overhead of $242,100 and 7,100 estimated direct labor-hours. Actual manufacturing overhead for the 2019-2020 year amounted to $243,600 and the actual direct labor-hours were 5,400

Erik's Florist Gump Company applied manufacturing overhead for the 2019 year was closest to: (Round your intermediate calculations to 2 decimal places.)

Homework Answers

Answer #1

Step-1, The predetermined overhead rate

Predetermined overhead rate = The total estimated Overhead cost / Estimated total direct labor hours

= $242,100 / 7,100 direct labor hours

= $34.10 per direct labor

Step-2, The applied manufacturing overhead for the 2019

Total applied overhead cost = Actual direct labor hours x Predetermined overhead rate

= 5,400 direct labor hours x $34.10 per direct labor hours

= $184,140

“Hence, the applied manufacturing overhead for the 2019 year was closest to $184,140”

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