Predetermined Overhead Rate
Hessmar Corporation manufactures one product and accounts for costs using a job-order costing system. You have obtained the following information from the corporation’s books and records for the year ended December 31, year 1:
Total manufacturing cost during last year was $500,000 based on actual direct material, actual direct labor, and manufacturing overhead applied on the basis of actual direct-labor dollars.
Manufacturing overhead was applied to work in process at 75 percent of direct-labor dollars. Applied manufacturing overhead for the year was 33 percent of the total manufacturing cost during the year.
Instructions:
Compute actual direct material, actual direct labor and applied manufacturing overhead.