Deltan corp. allocates overhead to production on the basis of direct labor costs. deltan's total estimated overhead is $450,000 and estimated direct labor is $180,000. determine the amount of overhead to be allocated to finished goods inventory if there is $20,000 of total direct labor cost in the jobs in the finished goods inventory.

QUESTION POSTED AT 29/05/2020 - 02:16 PM

Answered by admin AT 29/05/2020 - 02:16 PM

Hi there
First find Predetermined oH rate
Predetermined oH rate is
total estimated overhead divided by
estimated direct labor

Predetermined oH rate=
450,000÷180,000
=2.5

the amount of overhead to be allocated to finished goods inventory if there is $20,000 of total direct labor cost in the jobs in the finished goods inventory is
2.5×20,000
=50,000. ...answer

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