Question

# Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the...

Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of \$244,200 and 9,200 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to \$245,000 and actual direct labor-hours were 6,100.

The applied manufacturing overhead for the year was closest to: (Round your intermediate calculations to 2 decimal places.)

Garrison 16e Rechecks 2017-08-28

Multiple Choice

• \$162,443

• \$161,894

• \$305,366

• \$244,976

• Predetermined overhead rate = total estimated overhead ÷ estimated direct labor-hours = \$244,200 ÷ 9,200 direct labor-hours = \$26.54 per direct labor-hour
• Applied manufacturing overhead = actual direct labor-hours × predetermined overhead rate = 6,100 direct labor-hours × \$26.54 per direct labor-hour = \$161,894
• Applied manufacturing overhead is the amount of overhead allocated to the cost of goods manufactured. Actual overhead cannot be calculated until the end of the production. Therefore, a predetermined overhead rate is used to apply manufacturing overhead.

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