Managerial Accounting Sinclair Company manufactures a line of lightweight runnin

Question

Managerial Accounting Sinclair Company manufactures a line of lightweight running shoes. CEO Andrew Sinclair estimated that the company would incur $3,046,530 in manufacturing overhead during the coming year. Sinclair Company uses direct labor hours as its manufacturing overhead application base, predetermined overhead rate is $12.91/DLH and when it uses machine hours as its manufacturing overhead application base, predetermined overhead rate is $5.87/MH. Additionally, he estimated the company would operate at a level requiring 235,982 direct labor hours and 519,000 machine hours. At the end of the year, Sinclair Company had worked 210,000 direct labor hours, used 357,000 machine hours, and incurred $2,527,000 in manufacturing overhead. If Sinclair Company used direct labor hours as its manufacturing overhead application base, how much overhead was applied to jobs during the year?

Explanation / Answer

Answer:

No. of direct labor hours worked by end of the year X predetermined overhead rate
210,000 * $12.91= $27,11,100

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