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Luthan Company uses a plantwide predetermined overhead rate of $22.70 per direct labor-hour. This predetermined rate...

Luthan Company uses a plantwide predetermined overhead rate of $22.70 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $272,400 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours.

The company incurred actual total manufacturing overhead cost of $268,000 and 10,700 total direct labor-hours during the period.

Required:

Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.

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Answer #1

Answer :-

Manufacturing overhead cost that applied to all jobs = Predetermined overhead Rate × Actual Direct labor hours incurred during the period

Predetermined Overhead Rate = $22.70 per direct labor hours

Actual Direct labor hours incurred during the period = 10,700 direct labor hours during the period.

Manufacturing overhead cost that applied to all jobs = $22.70 per direct labor hours × 10,700 direct labor hours

Manufacturing overhead cost that applied to all jobs = $242,890

The amount of manufacturing overhead cost that would have been applied to all jobs during the period is $242,890 .

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