Question 15 1 pts A manufacturing company applies overhead based on direct labor

Question

Question 15 1 pts A manufacturing company applies overhead based on direct labor hours. The following information has been provided: Estimated Overhead Costs: $720,000 Estimated Direct labor hours: 90,000 Actual Overhead costs:$754,400 Actual Direct labor hours:92,000 Compute the predetermined overhead rate per direct labor hour. O $8.38 O $8.20 $8.00 O $7.83 Question 16 1 pts Using the information in the above question, the entry to assign overhead costs during the year would include a O debit to Overhead for $720.000 credit to credit to Overhead fors debit to overtead for for $736.000 5754400

Explanation / Answer

(15)

Pre determined overhead rate = Estimated overhead cost/Estimated direct labor hours

= 720,000/90,000

= $8

Hence, correct option is (c)

(16)

Pre determined overhead rate = $8 per direct labor hour

Actual direct labor hours = 92,000

Applied overhead cost = Pre determined overhead rate x Actual direct labor hours

= 8 x 92,000

= $736,000

Hence, the entry to assign overhead costs during the year would include credit to overhead for $736,000.

Hence, correct option is (b)

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