Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger

Exercise 8

Cornerstone Exercise 5-22 Predetermined Overhead Rate, Overhead Application
At the beginning of the year, Ilberg Company estimated the following costs:

Ilberg 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 $43,700.
Required:
1. Calculate the predetermined overhead rate for the year.
2. Calculate the overhead applied to production in December.