Kilt Company used a predetermined overhead rate of $42.00 per direct labor hour for the year and estimated that direct labor hours would total 5,500 hours. Assume the only inventory balance is an ending Work in Process balance of $17,000. How much overhead was applied during the year

Predetermined Overhead applied rate is calculated by dividing the budgeted overhead by the budgeted level of activity on which the overhead is applied. It is a rate at which the overhead is applied to a product / project/ department.

Overhead are applied using predetermined overhead rate and actual level of activity.

Applied overhead = Predetermined overhead rate x direct labor hours

Applied overhead = 5,500 x $42.00 = $231,000

jepessoa jepessoa · Answer 2 · 2020-04-18T05:02:16+02:00

Answer:

$210,000

Explanation:

predetermined overhead rate = $42.00 per direct labor hour

budgeted direct labor hours = 5,500 hours

ending work in process (WIP) = $17,000

applied overhead during the year?

direct materials = $110,000

direct labor hours = 5,000

direct labor costs = $150,000

incurred manufacturing overhead = $166,000

applied overhead = overhead rate x actual direct labor hours = $42.00 x 5,000 = $210,000

the company actually spent $44,000 less than budgeted (= $210,000 - $166,000)