A Corporation uses a predetermined overhead rate of $23.90 per direct labor hour. This predetermined rate was based on a cost formula that estmated $286,8000 of total manufacturing overhead for an estimated activity level of 12,000 direct labor hours. The company incurred actual total manufacturing overhead costs of $266,000 and 11,100 total direct labor hours during the period. Determine the amount of manufacturing overhead that would have been applied to all jobs during the period. Manufacturing overhead applied________?
To determine the amount of manufacturing overhead that would have been applied to all jobs during the period, we need to use the predetermined overhead rate and the actual direct labor hours.
First, let's calculate the predetermined overhead rate:
Predetermined Overhead Rate = Total Manufacturing Overhead / Estimated Activity Level
= $286,800 / 12,000 hours
= $23.90 per direct labor hour
Next, we can calculate the manufacturing overhead applied using the actual direct labor hours:
Manufacturing Overhead Applied = Predetermined Overhead Rate * Actual Direct Labor Hours
= $23.90 * 11,100 hours
= $265,290
Therefore, the amount of manufacturing overhead that would have been applied to all jobs during the period is $265,290.