Question

Luthan Company uses a plantwide predetermined overhead rate of $22.10 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $265,200 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead cost of $269,000 and 10,900 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.

Answer 1

Allocated MOH= $240,890

Step-by-step explanation:

Giving the following information:

Plantwide predetermined overhead rate of $22.10 per direct labor-hour.

The company incurred in 10,900 total direct labor-hours.

To calculate the allocated manufacturing overhead, we need to use the following formula:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 22.1*10,900

Allocated MOH= $240,890