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    Overhead Calculation

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    The Shimano Company allocates manufacturing overhead to production based on direct labor hours. The following information is available for Shimano:

    Estimated manufacturing overhead $403,200
    Actual manufacturing overhead $378,000
    Estimated direct labor hours 21,000
    Actual direct labor hours 20,000

    a. Compute Shimano's overhead application rate.
    b. Assuming that Shimano's overhead application rate is $19, calculate the amount of overhead that should be allocated to production.

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    https://brainmass.com/business/accounting/overhead-calculation-222883

    Solution Preview

    The Shimano Company allocates manufacturing overhead to production based on direct labor hours. The following information is available for Shimano:

    Estimated manufacturing overhead $403,200
    Actual manufacturing overhead $378,000
    Estimated direct labor hours 21,000
    Actual direct labor hours 20,000

    a. Compute Shimano's overhead application rate.

    The overhead application rate is the rate that would be used to apply the overhead to the products. Direct Material and Direct ...

    Solution Summary

    The solution explains how to calculate the overhead application rate and the amount of overhead applied

    $2.19