Mula, Inc. uses a plant wide predetermined overhead rate of @23.40 per direct la

Question

Mula, Inc. uses a plant wide predetermined overhead rate of @23.40 per direct labor hour. This predetermine rate was based on a cost formula that estimate $257,400 of total manufacturing overhead for an estimated activity level of 11,000 direct labor hours.

The company incurred actual total manufacturing overhead cost of $249,000 and 10,800 total direct labor hours during the period.

Required: On a separate accounting worksheet, compute the amount of manufacturing overhead cost that would have been applied to all jobs during the period.

Explanation / Answer

Amount of manufacturing overhead applied to all jobs = 10800*23.40= $252720

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