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bagirrra123 [75]
3 years ago
8

Purves Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $121

,000 and 10,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $113,000 and 10,900 total direct labor-hours during the period. The predetermined overhead rate is closest to____________.a. $10.37b. $12.10c. $11.10d. $11.30
Business
1 answer:
mash [69]3 years ago
6 0

Answer:

Option (b) is correct.

Explanation:

Given that,

Estimated total fixed manufacturing overhead = $121,000

Estimated direct labor-hours for the period = 10,000

Actual total fixed manufacturing overhead = $113,000

Actual total direct labor-hours during the period = 10,900

Predetermined overhead rate:

= Estimated total fixed manufacturing overhead ÷ Estimated direct labor hours

= $121,000 ÷ 10,000

= $12.10

Therefore, the predetermined overhead rate is closest to $12.10.

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