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Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $239,700 and 4,700 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $242,000 and actual direct labor-hours were 4,600.The applied manufacturing overhead for the year was closest to:
A) $229,586
B) $234,600
C) $242,006
D) $236,854
Manufacturing Overhead
Every cost linked to production that isn't categorized as direct material or direct labor expenses.
Direct Labor-Hours
A measurement of the time spent by workers who are directly involved in the manufacturing process.
Predetermined Overhead Rate
A rate calculated before a period begins, used to apply manufacturing overhead costs to products based on activity levels.
- Fathom the essence of manufacturing overhead and how it is applied across assorted bases like direct labor-hours and machine-hours.
- Calculate in advance the rates for overhead and perceive their application in the allocation of manufacturing overhead charges to products or jobs.
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Learning Objectives
- Fathom the essence of manufacturing overhead and how it is applied across assorted bases like direct labor-hours and machine-hours.
- Calculate in advance the rates for overhead and perceive their application in the allocation of manufacturing overhead charges to products or jobs.
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