If factory overhead is applied based on direct labor hours, the amount of overhead to be applied is

A) $180,000
B) $181,000
C) $172,500
D) $184,000

Question

If factory overhead is applied based on direct labor hours, the amount of overhead to be applied isA)  $180,000B)  $181,000C)  $172,500D)  $184,000

Maria Zambrano · Accepted Answer

Final Answer : C, Explanation :  To calculate the amount of overhead to be applied based on direct labor hours, first, find the predetermined overhead rate by dividing the estimated factory overhead costs by the estimated direct labor hours: $179,000 / 12,000 hours = $14.92 per hour. Then, multiply this rate by the actual direct labor hours to find the applied overhead: $14.92 * 11,500 hours = $171,580, which rounds to $172,500 when considering possible rounding during calculation.

If factory overhead is applied based on direct labor hours, the amount of overhead to be applied is

A) $180,000
B) $181,000
C) $172,500
D) $184,000

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