Question

Before the year began, Butler Manufacturing estimated that manufacturing overhead for the year would be $175,800 and that 13,600 direct labor hours would be worked. Actual results for the year included the following:
Actual manufacturing overhead cost $175,800
Actual direct labor hours 13,600
The predetermined manufacturing overhead rate per direct labor hour is closest to
A) $12.08.
B) $12.67.
C) $12.78.
D) $13.41

Answer 1

Answer:

$12.78

Explanation:

If you use I=PrT plug in 175,000 for I and then 13600 for P and then for time (T) plug in 1 year. The rate would be 12.92 which is closer to 12.78.