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Marigold Inc. sells a high-speed retrieval system for mining information. It provides the following information for the year. Budgeted. Actual Overhead cost $1,253,200 $1,224,200 Machine hours 56,700 49,400 Direct labor hours 104,000 98,400 Overhead is applied on the basis of direct labor hours. Compute the predetermined overhead rate. (Round answer to 2 decimal places, e.g. 12.25.) Predetermined overhead rate $ per direct labor hour. Determine the amount of overhead applied for the year.
Answer:
Predetermined Overhead rate=$12.05
Amount of overhead applied for the year= $1,185,720
Explanation:
Marigolds Inc, provided the following the following information for the year
Budgeted Actual
Overhead cost $1,253,200 $1,224,200
Machine hours. 56,700. 49,400
Direct labour. 104,000. 98,400
The predetermined overhead rate can be calculated as follows
= 1,253,200/104,000
= $12.05 per direct labor hour
The amount of overhead applied for the year can be calculated as follows
= 98,400×12.05
= $1,185,720
Hence the predetermined overhead rate is $12.05 and the amount of overhead applied for the year is $1,185,720
