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Snowy Company calculates overhead on the basis of direct labor costs. Estimated overhead is $300,000 and...

Snowy Company calculates overhead on the basis of direct labor costs. Estimated overhead is $300,000 and estimated direct labor is $200,000. Actual direct labor was $215,000. Remember you can submit your calculations for possible partial credit.

a) Calculate the Predetermined Overhead Rate $ = ______________per Direct Labor Cost

b) Calculate the amount of overhead applied $ =____________

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Expert Solution

Given in the question,                                                       

Estimated overhead = $300,000

Estimated direct labor cost = $200,000

Actual direct labor cost = $215,000

a) Predetermined overhead rate = Estimated overhead/ Estimated direct labor cost

                        = 300000/200000    (Substituting the value from above)                      

                        = $ 1.5 per direct labor cost

b) Actual overhead applied = Actual direct labor cost X Predetermined overhead rate

                                            = 215000 X 1.5 (Substituting the value from above)                      

                                            = $ 322,500

ekkarill92 answered 2 years ago
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