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Luthan Company uses a predetermined overhead rate of $13

Management

Luthan Company uses a predetermined overhead rate of $13.40 pe rdirect labor-hour. this predetermined rate was based on 19,000 estimated direct labor-hours and $254,600 of estimated total manufacturing overhead.

 

the company incurred actual total manufacturing overhead costs of$249,000 and 18,200 total direct labor-hours during the period.

 

Determine the amount of manufacturing overhead that would have been applied to units of product during the period.

 

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Computation of Amount of Manufacturing Overhead applied:

Predetermined Overhead Rate = 254600/19000 = $13.40 per Direct Labor Hour

Actual Direct Labor Hours Worked = 18,200 hours

Amount of Manufacturing Overhead Applied = Actual Direct Labor Hours Worked * Predetermined Overhead Rate

= 18,200 * $13.40 

Amount of Manufacturing Overhead Applied = $243,880

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