Amanda Bitsworth manufactures votive candles Overhead is app

Amanda Bitsworth manufactures votive candles. Overhead is applied to products on the basis of direct labor hours. Last year, total overhead costs were expected to be $86,000. Actual overhead costs totaled $59,000 for 7,000 actual hours. At the end of the year, overhead was underapplied by $4,500

A. Calculate the predetermined overhead rate. If required, round your answer to nearest dollar.

__________ Per direct labor dollar

B. How much overhead should be applied to a job that was completed in three direct labor hours?

Solution

A.

86000/7000=$ 12.3

B.

3*12.3=$36.9