The Chesney Company Uses Job-Order Costing and a Predetermined Overhead

question 37

Short Answer

The Chesney Company uses job-order costing and a predetermined overhead rate based on direct labor dollars. For 2009 the company incurred $489,000 of actual manufacturing overhead costs. Their manufacturing overhead control account at the end of the year indicated that they had under-applied manufacturing overhead costs by $19,000. If the predetermined overhead rate was 80% of direct labor dollars, then direct labor costs for the year totaled: a. $587,500
B) $635,000
C) $611,250
D) $581,560

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