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2 years ago

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Edison Corporation's variable manufacturing overhead rate is $5.00 per direct labor-hour. Total budgeted fixed overhead is $25,0

00 per month. The $25,000 per month includes $7,000 in depreciation expense. Total budgeted direct labor-hours for the month of July is 20,000. Based on the month of July only, the predetermined overhead rate is $ (Enter your answer as a number rounded to 2 decimal places.)

1 answer:

meriva2 years ago

8 0

Based on the month of July only, the predetermined overhead rate is $6.25.

<h3>Predetermined overhead rate</h3>

First step

Total budgeted manufacturing overhead =(Budgeted direct labor hours × Variable overhead rate) + Total budgeted fixed overhead

Total budgeted manufacturing overhead = (20,000 × $5) + $25,000

Total budgeted manufacturing overhead = $100,000 + $25,000

Total budgeted manufacturing overhead = $125,000

Second step

Predetermined overhead rate=Total budgeted manufacturing overhead/Total budgeted direct labor-hours

Predetermined overhead rate=$125,000/20,000

Predetermined overhead rate=6.25

Inconclusion the predetermined overhead rate is $6.25.

Learn more about predetermined overhead rate here:brainly.com/question/26372929

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3 years ago

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