Princess pink uses direct labor to calculate overhead, Accounting Basics

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Princess pink uses direct labor to calculate overhead

Problem

Princess Pink uses direct labor to calculate overhead. Estimated overhead for next year is $150,000 and estimated direct labor is $75,000. During 2013, actual direct labor was $80,000 and actual overhead was $125,000. Calculate the Predetermined Overhead rate for next year and the amount of Overhead applied.

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Accounting Basics: Princess pink uses direct labor to calculate overhead

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Accounting Basics: Princess pink uses direct labor to calculate overhead

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