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Question - The Company applies overhead based on direct labor hours. The estimated direct labor hours for next year are 16,000 hours.
Direct labor
$90,000
Direct materials
72,000
Indirect labor
19,200
Indirect materials
8,400
Depreciation-factory building
8,200
Depreciation-factory machinery
4,200
Depreciation-office equipment
500
Factory utilities
4,900
Factory property taxes
3,100
Selling expenses
25,000
Miscellaneous overhead costs
5,600
General and administrative expenses
19,000
Compute the overhead application rate that will be used to apply overhead during the next year.
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