Answer:
Gross profit = $790000
Explanation:
Suppose:
Sales = 1000000
Cost of goods sold = 200000
Actual overhead = 100000
Direct labor used = 15000 hours
Predetermined rate = $ 6 per hour
Computation of gross profit:
Sales = 1000000
less: Cost of goods sold =200000
Add: under applied overhead (w#1) = 10000
(210000)
Gross profit 790000
(w#1) Applied overhead = Actual labour hours * predetermined rate
= 15000 * 6 = $90000.
Actual overhead = 100000
Under applied overhead 10000
