Goldsmith Jewelry uses direct labor hours to apply overhead and estimated total overhead costs at $52,500 and direct labor hours at 12,500 for the second quarter. The direct labor quantity standard is 1.75 hours per unit, and the company produced 2,400 units in the second month of the second quarter. This required 4,450 direct labor hours. What value should be used for overhead applied in the total overhead variance calculation

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nicoklepatzky nicoklepatzky · Answer 1 · 2020-05-11T03:06:16+02:00

Answer:

Explanation:

answer: $17,640

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abiolataiwo2015 abiolataiwo2015 · Answer 2 · 2021-12-02T13:52:00+01:00

The value that should be used for overhead applied in the total overhead variance calculation is $17,640.

First step is to calculate the predetermined overhead rate

Predetermined overhead rate=Estimated overhead costs/ estimated direct labor hours

Predetermined overhead rate=$52,500/ 12,500

Predetermined overhead rate=$4.20/DLH overhead rate

Second step is to calculate Overhead applied

Overhead applied at standard hours allowed = $4.2 x 2,400 x 1.75

Overhead applied at standard hours allowed = $17,640

Inconclusion the value that should be used for overhead applied in the total overhead variance calculation is $17,640.

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