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Assume you own a manufacturing company that budgets an estimated $500,000 in overhead for the coming year and 10,000 direct labor hours. Also assume your
Assume you own a manufacturing company that budgets an estimated $500,000 in overhead for the coming year and 10,000 direct labor hours. Also assume your manufacturing overhead application base is direct labor hours. Actual overhead during the year amounts to $432,000, and employees work 9,000 actual direct labor hours. Compute the predetermined overhead rate AND the amount of overhead that is applied to work-in-process inventory.
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