Hello i need help with problem (b) please and thank you! PROBLEM 2 – JOB ORDER H

Question

Hello i need help with problem (b) please and thank you!

PROBLEM 2 – JOB ORDER

Hickman Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows:

Actual manufacturing overhead                              $118,000

Estimated manufacturing overhead                     $110,000

Direct labor hours incurred                                                 4,800

Direct labor hours estimated                                             5,000

Instructions

(a) Calculate the predetermined overhead rate.

Estimated manufacturing overhead/direct labor hours

=(110000/5000)

=$22 per direct labor hour

(b) Calculate the amount of applied manufacturing overhead.

Explanation / Answer

a. Predetermined overhead rate = Estimated Manufacturing overhead / Estimated labor hours

= $110000/ 5000

= $22 per hour

b. Applied manufacturing overhaeds = Actual hours * predetermined overhead rate

= 4800 hours * $22

= $105600

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