Question

MC Qu. 36 The Jefferson Company made the following est... Jefferson Company made the following estimates for the 2014 accounting period: Overhead costs: $335,400 Direct labor hours: 78,000 Assume Overhead is allocated on the basis of direct labor hours. Of 32,000 hours of labor are actually used in February, how much overhead cost would be allocated to work in process during the month

Answer 1

Answer:

allocated during the month 137,600

Explanation:

$\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate$

To determinate the overhead rat, we distribute all the overhead cost over a cost driver. In this case it will be the labor hours

total overhead cost 335,400

direct labour hours    78,000

rate: 335,400 / 78,000 = 4.3

now we calculate the applied overhead

actual hours x rate

32,000 x 4.3 = 137,600

This will be amount allocated to work in process during the month