Luthan Company uses a plantwide predetermined overhead rate of $22.60 per direct labor-hour. This predetermined rate is based on a cost formula that estimated
Luthan Company uses a plantwide predetermined overhead rate of $22.60 per direct labor-hour. This predetermined rate is based on a cost formula that estimated $271,200 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 $268,000 and 10,600 total direct labor-hours. Required: Calculate the manufacturing overhead cost applied to all jobs. Manufacturing overhead applied $ 239,560 Explanation Actual direct labor-hours (a) Predetermined overhead rate (b) Manufacturing overhead applied (a) x (b) 10,600 $ 22.60 $ 239,560
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