Brief Exercise 17-1 Digger Inc. sells a high-speed retrieval system for mining i

Question

Brief Exercise 17-1 Digger Inc. sells a high-speed retrieval system for mining information. It provides the following information for the year. Budgeted Actual Overhead cost Machine hours Direct labor hours $975,000$950,000 45,000 92,000 50,000 100,000 Overhead is applied on the basis of direct labor hours. Your answer is incorrect. Try again. Compute the predetermined overhead rate. (Round answer to 2 decimal places, e.g. 12.25.) Predetermined overhead rate per direct labor hour Your answer is incorrect. Try again. Determine the amount of overhead applied for the year. Amount of overhead applied

Explanation / Answer

Predetermined overhead rate=estimated overhead/estimated direct labor hours

=(975000/100,000)=$9.75 per direct laor hour.

Hence applied overhead=(9.75*Actual direct labor hours)

=(9.75*92000)=$897000.

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