Question

Manufacturing overhead was estimated to be $591,600 for the year along with 20,400 direct labor hours. Actual manufacturing overhead was $551,820, and actual labor hours were 21,800. The predetermined manufacturing overhead rate per direct labor hour would be: Multiple Choice $27.05. $21.75. $29.00. $0.07.

Answer 1

Answer:

Predetermined manufacturing overhead rate = $29

Explanation:

Given:

Estimated manufacturing overhead = $591,600

Estimated direct labor hours = 20,400

Actual manufacturing overhead = $551,820

Actual direct labor hours = 21,800

Computation of predetermined manufacturing overhead rate:

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

Predetermined manufacturing overhead rate = $591,600 / 20,400

Predetermined manufacturing overhead rate = $29

Note: Actual manufacturing overhead and labor hours do not include in the computation of predetermined manufacturing overhead rate.