Answer:
Results are below.
Explanation:
Giving the following information:
Budgeted machine hours (based on practical capacity) 10,000
Budgeted direct-labor hours (based on practical capacity) 20,000 Budgeted direct-labor rate $ 13
Budgeted manufacturing overhead $ 364,000
<u>To calculate the predetermined manufacturing overhead rate we need to use the following formula:</u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
<u>Machine hours:</u>
Predetermined manufacturing overhead rate= 364,000 / 10,000
Predetermined manufacturing overhead rate= $36.4 per machine hour
<u>Direct labor hours:</u>
Predetermined manufacturing overhead rate= 364,000 / 20,000
Predetermined manufacturing overhead rate= $18.2 per direct labor hour
<u>Direct labor cost:</u>
Direct labor cost= 20,000*13= $260,000
Predetermined manufacturing overhead rate= 364,000 / 260,000
Predetermined manufacturing overhead rate= $1.4 per direct labor dollar
