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Unformatted text preview: amont of overhead to be APPLIED to each job. Therefore management estimated that total overhead for the YEAR would be $200,000 and total direct labor for the YEAR would be $125,000 which means $200,000/$125,000 is 160% of direct labor cost for any period within the year. You now multiply the total direct labor INCURRED ON EACH JOB by 160% to get the amount of overhead to allocate to each job. Overhead is allocated as a function of direct labor for these jobs using a predetermined overhead rate. That means that you take the...
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This note was uploaded on 02/01/2011 for the course ACCT 203 taught by Professor Hylton during the Summer '08 term at George Mason.
- Summer '08