During the month of August, Ranson Productions applied overhead to jobs using an
ID: 2425155 • Letter: D
Question
During the month of August, Ranson Productions applied overhead to jobs using an overhead rate of $0.60 per dollar of direct labor. Actual direct labor in August was 12,000 hours at $15.00 per hour, for a total of $180,000. Estimated overhead in August was $111,600.
Actual overhead was composed of the following items:
Indirect materials $ 16,400
Indirect labor 22,000
Utilities 24,500
Depreciation 38,700
Repair expense 13,500
Total $115,100
How much overhead was applied during August by Ranson Productions?
A. $115,100
B. $108,000
C. More information is needed to answer
D. $111,600
Explanation / Answer
As per the norms of Ranson productions over head applied is $0.60 per $ of Direct Labour hour
during August direct Labor Hour cost = $180,000
there fore Overhead applied = $ 180,000 X 0.60 = $ 108,000
So correct option is B. $ 108,000
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