Calculation of applied manufacturing overhead based on direct labor hour rate.
1. Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $239,700 and 4,700 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $242,000 and actual direct labor-hours were 4,600.
The applied manufacturing overhead for the year was closest to:
a. $234,600
b. $229,586
c. $236,854
d. $242,006
2. On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During November, $95,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $3,000.
Prepare journal entries to record these events. Use those journal entries to answer the following questions:
The debits to the Raw Materials account for the month of November total:
a. $78,000
b. $32,000
c. $95,000
d. $110,000