Luthan Company uses a plantwide predetermined overhead rate of $23.70 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $284,400 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor- hours. The company incurred actual total manufacturing overhead cost of $266,000 and 11,800 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.

Luthan Company uses a plantwide predetermined overhead rate of $23.70 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $284,400 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor- hours. The company incurred actual total manufacturing overhead cost of $266,000 and 11,800 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.

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Description: Please do not give image format Exercise 2-2 Apply Overhead Cost to Jobs [LO2-2]Luthan Company uses a plantwide predetermined overhead rate of $23.70 per direct labor-hour. This predetermined rate was basedon a cost formula that estimated $284,400 of

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter2: Job Order Costing

Section: Chapter Questions

Problem 4BE: Applying factory overhead Bergan Company estimates that total factory overhead costs will be 620,000...

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Exercise 2-2 Apply Overhead Cost to Jobs [LO2-2]
Luthan Company uses a plantwide predetermined overhead rate of $23.70 per direct labor-hour. This predetermined rate was based
on a cost formula that estimated $284,400 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-
hours.
The company incurred actual total manufacturing overhead cost of $266,000 and 11,800 total direct labor-hours during the period.
Required:
Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.
Manufacturing overhead
applied

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