Question - The Company applies overhead based on direct labor hours. The estimated direct labor hours for next year are 16,000 hours.
|
Direct labor
|
$90,000
|
|
Direct materials
|
72,000
|
|
Indirect labor
|
19,200
|
|
Indirect materials
|
8,400
|
|
Depreciation-factory building
|
8,200
|
|
Depreciation-factory machinery
|
4,200
|
|
Depreciation-office equipment
|
500
|
|
Factory utilities
|
4,900
|
|
Factory property taxes
|
3,100
|
|
Selling expenses
|
25,000
|
|
Miscellaneous overhead costs
|
5,600
|
|
General and administrative expenses
|
19,000
|
Compute the overhead application rate that will be used to apply overhead during the next year.