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17 October, 18:03

Mesa corp. allocates overhead to production on the basis of direct labor costs. mesa's total estimated overhead is $450,000 and estimated direct labor is $180,000. determine the amount of overhead to be allocated to finished goods inventory if there is $20,000 of total direct labor cost in the jobs in the finished goods inventory. $8,000. $20,000. $70,000. $50,000. $90,000.

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  1. 17 October, 18:08
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    Hi there

    First find the predetermined overhead rate

    Predetermined oH rate is total estimated overhead divided by estimated direct labor

    Predetermined oH rate is

    450,000:180,000

    =2.5

    the amount of overhead to be allocated to finished goods inventory if there is $20,000 of total direct labor cost in the jobs in the finished goods inventory is

    2.5*20,000

    =50,000 ... answer

    Good luck!
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