Sykora, inc., which uses a predetermined overhead rate based on direct labor hours, estimated total overhead for the year to be $12,000,000 and total direct labor hours to be 320,000 hours. calculate sykora’s predetermined overhead rate. in april, sykora incurred actual overhead costs of $1,050,000 and used 30,000 hours. how much was sykora’s over- or under-applied overhead for the month of april? enter your answer in the following space. show all calculations.

Instructions are listed below.

Explanation:

Giving the following information:

Sykora, Inc., which uses a predetermined overhead rate based on direct labor hours, estimated total overhead for the year to be $12,000,000 and total direct labor hours to be 320,000 hours.

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 12,000,000/320,000= $37.5 per direct labor hour

In April, Sykora incurred actual overhead costs of $1,050,000 and used 30,000 hours.

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 37.5*30,000= $1,125,000

Over/under allocation= real MOH - allocated MOH

Over/under allocation= 1,050,000 - 1,125,000= 75,000 overallocated

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