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Answer:
Allocated MOH= $8,844
Explanation:
Giving the following information:
Production= 670 boxes
Each box of tile requires 0.75 hours of direct labor.
Direct labor rate= $16 per hour.
Manufacturing overhead is applied at a rate of 110% of direct labor costs.
First, we need to determine the total direct labor costs:
Direct labor hours= 670*0.75= 502.5
Direct labor costs= 502.5*16= $8,040
To calculate the applied overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.1*8,040
Allocated MOH= $8,844