Question

Dagger Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $210,900. At the end of the year, actual direct labor-hours for the year were 15,000 hours, manufacturing overhead for the year was underapplied by $11,400, and the actual manufacturing overhead was $204,900. The predetermined overhead rate for the year must have been closest to:

Answer 1

Answer:

$12.90

Explanation:

Relevant data provided as per the question below:-

Actual manufacturing overhead = $204,900

Underapplied = $11,400

Number of hours = 15,000

As per the given question the solution of predetermined overhead rate is provided below:-

$predetermined\ overhead\ rate = \frac{Actual\ manufacturing\ overhead\ -\ Under\ applied}{Number\ of\ hours}$

$= \frac{\ 204,900 -\ 11,400}{15,000}$

= $\frac{\ 193,500}{15,000}$

= $12.90

So, we have calculated the predetermined overhead rate by using the above formula.