The following information is provided for the year: $$\begin{array} { l r }
\text { Actual direct labor hours worked } & 42,760 \
\text { Budgeted overhead } & \$ 900,000 \
\text { Budgeted direct labor hours } & 46,650 \
\text { Actual overhead costs incurred } & \$ 748,350
\end{array}$$ Assuming normal costing is used, calculate the amount of overhead applied for the year. (Round the answer to two decimal places.)
A)$568,750.00
B)$441,031.25
C)$824,840.40
D)$525,000.00

Question

The following information is provided for the year: $$\begin{array} { l r } 
\text { Actual direct labor hours worked } & 42,760 \
\text { Budgeted overhead } & \$ 900,000 \
\text { Budgeted direct labor hours } & 46,650 \
\text { Actual overhead costs incurred } & \$ 748,350
\end{array}$$ Assuming normal costing is used, calculate the amount of overhead applied for the year. (Round the answer to two decimal places.)
A)$568,750.00
B)$441,031.25
C)$824,840.40
D)$525,000.00

Quizplus · Accepted Answer

The amount of overhead applied for the year is calculated using the predetermined overhead rate (POR) which is based on budgeted amounts. The POR is calculated as Budgeted Overhead / Budgeted Direct Labor Hours = $900,000 / 46,650 = $19.29 per direct labor hour. Then, the overhead applied is POR * Actual Direct Labor Hours Worked = $19.29 * 42,760 = $824,840.40.

The Following Information Is Provided for the Year Assuming Normal Costing Is Used, Calculate the Amount of Overhead