Krier Corporation uses a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $738,000 and 30,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $792,000 and 31,500 total direct labor-hours during the period.The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $831,600
B) $54,000
C) $774,900
D) $738,000

Question

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total fixed manufacturing overhead / Estimated total direct labor-hours
Predetermined overhead rate = $738,000 / 30,000 = $24.60 per direct labor-hour

Therefore, the amount of manufacturing overhead that should have been applied to all jobs during the period = Predetermined overhead rate × Actual total direct labor-hours worked
Amount of manufacturing overhead = $24.60 per direct labor-hour × 31,500 direct labor-hours = $774,900

Thus, the closest answer is C.

Krier Corporation Uses a Predetermined Overhead Rate That Was Based