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.Applied = 57,000 DLH @ $6/DLH = $342,000

Question

Quizplus · Accepted Answer

Manufacturing overhead applied can be calculated using the formula: Predetermined overhead rate x Actual direct labor hours. The predetermined overhead rate can be calculated as Estimated total manufacturing overhead cost / Estimated total direct labor hours. Based on the given information, the predetermined overhead rate is $330,000 / 55,000 DLH = $6/DLH. Therefore, the manufacturing overhead applied is 57,000 DLH x $6/DLH = $342,000. Option B is the correct answer.

Sawyer Manufacturing Company Uses a Predetermined Overhead Rate Based on Direct