At the beginning of the year, Kreskin Company estimated the following costs: Overhead .......$450,000 Direct labor cost

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At the beginning of the year, Kreskin Company estimated the following costs:

Overhead .......$450,000

Direct labor cost ....600,000

Kreskin uses normal costing and applies overhead on the basis of direct labor cost. (Direct labor cost is equal to total direct labor hours worked multiplied by the wage rate.) For the month of December, direct labor cost was $38,900.

Required:

1. Calculate the predetermined overhead rate for the year.

2. Calculate the overhead applied to production in December.

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Cornerstones of Managerial Accounting

ISBN: 978-0324660135

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Authors: Mowen, Hansen, Heitger

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Question Posted: Feb 03, 2012 06:53 AM

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At the beginning of the year, Kreskin Company estimated the following costs: Overhead .......$450,000 Direct labor cost

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Cornerstones of Managerial Accounting

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