Using the following accounts and a predetermined overhead rate of 130% of direct labor cost, compute the amount of applied overhead.

A) $78,000.
B) $60,000.
C) $138,000.
D) $71,890.
E) $90,500.

Question

Using the following accounts and a predetermined overhead rate of 130% of direct labor cost, compute the amount of applied overhead.

A) $78,000. 
B) $60,000. 
C) $138,000. 
D) $71,890. 
E) $90,500.

Quizplus · Accepted Answer

$35,200 + 55,300 + DL + OH − 203,300 = $25,200
DL + OH = $25,200 − 35,200 − 55,300 + 203,300
DL + OH = $138,000; DL + 1.3DL = $138,000; 2.3DL = $138,000; DL = $60,000
$60,000 + OH = $138,000; OH = $78,000

Using the Following Accounts and a Predetermined Overhead Rate of 130