Showboat Corporation had actual manufacturing overhead costs for the most recent year of $29,500. Manufacturing overhead is allocated using a predetermined manufacturing overhead rate of $1.50 per direct labor hour. Direct labor cost is $19 per hour. At the end of the year, Cabaret Corporation found it had overallocated manufacturing overhead by $1,250. How much manufacturing overhead was allocated in total during the year?

Question

Drake Reeves

Business

14 October, 19:26

Showboat Corporation had actual manufacturing overhead costs for the most recent year of $29,500. Manufacturing overhead is allocated using a predetermined manufacturing overhead rate of $1.50 per direct labor hour. Direct labor cost is $19 per hour. At the end of the year, Cabaret Corporation found it had overallocated manufacturing overhead by $1,250. How much manufacturing overhead was allocated in total during the year?

+1

Answers (1)

Know the Answer?

Nadeen · Answer 1

The manufacturing overhead was allocated in total during the year is $20,500

Explanation:

The computation of the allocated manufacturing overhead is shown below:

= (Actual manufacturing overhead costs + over allocated manufacturing overhead) : (predetermined manufacturing overhead rate)

= ($29,500 + $1,250) : ($1.50)

= $30,750 : $1.50

= $20,500

The direct labor cost should not be considered in the computation part. Hence, ignored it