Question

Harris fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. at the beginning of the year, it estimated that 20,000 direct labor-hours would be required for the period’s estimated level of production. the company also estimated $94,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. harris';s actual manufacturing overhead for the year was $123,900 and its actual total direct labor was 21,000 hours.

Answer 1

Predetermined overhead= total estimated overhead cost(machine hours , direct labor) /estimated allocation base

predetermined overhead= $534,000 +(31000 DLH x $3)

predetermined overhead= $20.23/DLH

hope this helps

Answer 2

Answer:

Predetermined overhead rate = Estimated total manufacturing overhead / Estimated total labor hours = $ 6.70 per direct labour hour

Step-by-step explanation:

Estimated total manufacturing overhead = Estimated fixed moh + estimated variable moh

= 94,000 + (20,000 * 2)

= 134,000

Predetermined overhead rate = Estimated total manufacturing overhead / Estimated total labor hours

= 134,000 / 20,000

= 6.70