Harris fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. at the beginning of the yea
r, 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.
