value: 6.66 points Luthan Company uses a predetermined overhead rate of $23.40 p

Question

value: 6.66 points Luthan Company uses a predetermined overhead rate of $23.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $280,800 of total manufacturing overhead for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead costs of $266,000 and 12,800 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period. Hints References eBook & Resources Hint#1 Check my work 6

Explanation / Answer

Solution:

Manufacturing overhead applied to all jobs during the period = Actual direct labor hours * Pre determined overhead rate

= 12800 * $23.40 = $299,520

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