Luthan Company uses a predetermined overhead rate of 2250 pe

Luthan Company uses a predetermined overhead rate of $22.50 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $270,000 of total manufacturing overhead for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead costs of $266,000 and 11,200 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.

Solution

amount of manufacturing overhead that would have been applied to all jobs during the period would be equal to

=Predetermined overhead rate*Actual total direct labor-hours

which is equal to

=($22.5*11200)

which is equal to

=$252000.