Sawyer Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.Last year,the company worked 57,000 actual direct labour hours and used 40,000 machine hours.The company had estimated that it would work 55,000 direct labour hours using 44,000 machine hours during the year and incur $330,000 of manufacturing overhead cost.What was the company's manufacturing overhead applied for the year?
A) $345,000.
B) $342,000.
C) $330,000.
D) $300,000.

Question

Quizplus · Accepted Answer

The predetermined overhead rate is calculated as: Estimated manufacturing overhead cost / Estimated direct labor hours = $330,000 / 55,000 = $6 per direct labor hour. The manufacturing overhead applied is then calculated as: Actual direct labor hours x Predetermined overhead rate = 57,000 x $6 = $342,000.

Sawyer Manufacturing Company Uses a Predetermined Overhead Rate Based on Direct