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Using the following accounts and an overhead rate of 140% of direct labor cost, compute the amount of applied overhead. Work in Process Inventory Beginning WIP 35,100 Direct materials 57,200 Direct labor ? Factory Overhead ? To Finished Goods 213,300 Ending WIP 25,100 Finished Goods Inventory Beginning FG 5,100 Cost of Goods Mfg'd 213,300

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Answer:

$85,225

Explanation:

The computation of the applied overhead is shown below:

Let us assume that the Direct labor be X

And, the factory overhead be 1.4X

As we know that

Cost of goods manufactured = Beginning work in process + direct material + direct labor + factory overhead - ending work in process

$213,300 = $35,100 + $57,200 + X + 1.4X - $25,100

$213,300 = $67,200 + 2.4X

$146,100 = 2.4X

X = $60,875

And, the factory overhead is

= $60,875 × 1.4

= $85,225

hence, the applied overhead is $85,225

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