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Flura [38]
4 years ago
14

Gerstein Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-h

ours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.70 per direct labor-hour, and 50,000 direct labor-hours. The company recently completed Job M800 which required 150 direct labor-hours. The predetermined overhead rate is closest to:
Business
1 answer:
GalinKa [24]4 years ago
6 0

Answer:

The predetermined overhead rate is $5.5 per hour

Explanation:

The formula to compute the predetermined overhead rate is shown below

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours)

where,

Total estimated manufacturing overhead = Fixed manufacturing overhead + variable manufacturing overhead

 = $90,000 + $3.70 × 50,000 direct labor hours

= $90,000 + $185,000

= $275,000

And, the direct labor hour is 50,000

Now put these values to the above formula  

So, the value would equal to

= $275,000 ÷ 50,000 direct labor hours

= $5.5 per hour

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1 year ago
Padco averages $15 million worth of inventory in all of its worldwide locations. they operate 51 weeks a year and each week aver
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Padco averages $15 million worth of inventory in all of its worldwide locations. they operate 51 weeks a year and each week averages $3 million in sales (at cost). their inventory turnover is 10.2 turns.

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2 years ago
The following information relating to a company's overhead costs is available. Actual total variable overhead $ 75,000 Actual to
NARA [144]

Answer:

$5,000 favorable

Explanation:

The computation of the total variable overhead variance is given below:

= Budgeted machine hours allowed for actual output × Budgeted variable overhead rate per machine hour - Actual total variable overhead

= 32,000 hours × $2.50 - $75,000

= $80,000 - $75,000

= $5,000 favorable

Since the favorable is more than the actual so it should be favorable

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3 years ago
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