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Exercise 15-17 Overhead rate calculation, allocation, and analysis LO P3 Moonrise Bakery applies factory overhead based on diExercise 15-17 Overhead rate calculation, allocation, and analysis LO P3 Moonrise Bakery applies factory overhead based on di

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Answer #1

1.

Fixed overhead/Direct labor cost = overhead rate

2,100,000/3,500,000 = Overhead rate

60% = Overhead rate

Overhead Rate
Choose Numerator / Choose Denominator = Overhead Rate
Fixed Overhead / Direct labor cost = Overhead Rate
2,100,000 / 3,500,000 = 60%

2.

Total cost of work in process inventory 76,000
Direct labor cost -25,000
Factory overhead ( 25,000 x 60%) -15,000
Direct Material $36,000

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