Question

Lister Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $624,000 Estimated direct labor-hours at the beginning of the year 39,000 direct labor-hours Results of operations: Actual direct labor-hours 36,000 direct labor-hours Manufacturing Overhead Indirect labor cost $ 131,000 Other manufacturing overhead costs incurred $ 543,000 The total amount of manufacturing overhead applied to production is:

Answer 1

Answer:

applied overhead: 576,000

Explanation:

To know the amount applied to production we first need to solve for the predetermined overhead rate:

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

The estimated overhead is 624,000 and will be distribute over 39,000 labor hours

$ 624,000 / 39,000 labor hours= 16 predetermined rate

Applied overhead:

actual labor hours x overhead rate:

36,000 x $16 = $576,000