Answer:
Predetermined manufacturing overhead rate= $2.5 per direct labor hour
Explanation:
<u>Giving the following information: </u>
Jameson estimates that 20,000 direct labor-hours will be worked during the year.
Rent on factory building......................$15,000
Depreciation on factory equipment......$8,000
Indirect labor.......................................$12,000
Production supervisor's salary.............$15,000
<u>First, we need to calculate the estimated overhead costs:</u>
estimated overhead costs= Rent on factory building + Depreciation on factory equipment + Indirect labor + Production supervisor's salary
estimated overhead costs= 15,000 + 8,000 + 12,000 + 15,000
estimated overhead costs= $50,000
<u>Now, we can determine the predetermined overhead rate:</u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 50,000 / 20,000
Predetermined manufacturing overhead rate= $2.5 per direct labor hour
