Hamilton Company applies manufacturing overhead costs to products based on direct labor hours. The company estimates manufacturing overhead cost for the year to be $262,000 and direct labor hours to be 20,000. Actual overhead for the year was $290,000. Required: 1. Compute the predetermined overhead rate. 2. If the company actually used 23,200 direct labor hours, how much manufacturing overhead is applied to their job? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the predetermined overhead rate. Note: Round your answer to 2 decimal places. Predetermined Overhead Rate < Required 1 Required 2 >

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Hamilton Company applies manufacturing overhead costs to products based on direct labor hours. The company estimates
manufacturing overhead cost for the year to be $262,000 and direct labor hours to be 20,000. Actual overhead for the year
was $290,000.
Required:
1. Compute the predetermined overhead rate.
2. If the company actually used 23,200 direct labor hours, how much manufacturing overhead is applied to their job?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the predetermined overhead rate.
Note: Round your answer to 2 decimal places.
Predetermined Overhead Rate
89
SEP
17
< Required 1
Prev
1 of 8
tv
‒‒‒
Required 2 >
Next >
S
LAO
Transcribed Image Text:Hamilton Company applies manufacturing overhead costs to products based on direct labor hours. The company estimates manufacturing overhead cost for the year to be $262,000 and direct labor hours to be 20,000. Actual overhead for the year was $290,000. Required: 1. Compute the predetermined overhead rate. 2. If the company actually used 23,200 direct labor hours, how much manufacturing overhead is applied to their job? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the predetermined overhead rate. Note: Round your answer to 2 decimal places. Predetermined Overhead Rate 89 SEP 17 < Required 1 Prev 1 of 8 tv ‒‒‒ Required 2 > Next > S LAO
Expert Solution
Step 1: Introduce to predetermined overhead rate

Predetermined Overhead Rate :— It is the rate used to allocate manufacturing overhead cost to cost object under traditional costing method. It is calculated by dividing total estimated manufacturing overhead cost by estimated usage of cost allocation base. Applied Overhead is calculated by multiplying predetermined overhead rate by actual usage of cost allocation base. 

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