Sawyer Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods balance of $9,000.

Sawyer Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods balance of $9,000.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter9: Applications Of Cost Theory

Section: Chapter Questions

Problem 5E

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Question

Sawyer Company had the following information for
the year:
Direct materials used
$190,000
Direct labor incurred (7,000 hours)
$245,000
Actual manufacturing overhead incurred $273,000
Sawyer Company used a predetermined overhead
rate using estimated overhead of $320,000 and
8,000 estimated direct labor hours. Assume the only
inventory balance is an ending Finished Goods
balance of $9,000.
How much overhead was applied during the year?
A. $245,000
B. $273,000
C. $280,000
D. $320,000

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