Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $ 750 comma 000 and $ 550 c

Question

4 years ago

6

Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $ 750 comma 000 and $ 550 c

omma 000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 16 comma 000 hours and 8 comma 000 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.)

Business

1 answer:

pochemuha · Answer 1 · 2022-01-04T16:10:59+03:00

Answer:

Estimated manufacturing overhead rate= $69 per machine hour.

Explanation:

Giving the following information:

Aaron allocates overhead costs based on machine hours. The estimated machine hours for the coming year are 8,000 hours. Manufacturing overhead costs for the coming year are $ 550,000.

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base= 550000/8000= $69 per machine hour.

​Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $ 750 comma 000 and $ 550 c

Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $ 750 comma 000 and $ 550 c