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givi [52]
3 years ago
10

Moonrise Bakery applies factory overhead based on direct labor costs. The company incurred the following costs during 2017: dire

ct materials costs, $660,000; direct labor costs, $3,100,000; and factory overhead costs applied, $2,170,000.
1. Determine the company's predetermined overhead rate for year 2017.
Business
1 answer:
Bumek [7]3 years ago
6 0

Answer:

$0.70

Explanation:

Given that,

Direct materials costs = $660,000

Direct labor costs = $3,100,000

Factory overhead costs applied = $2,170,000

company's predetermined overhead rate for year 2017:

= Factory overhead costs applied  ÷ Direct labor costs

= $2,170,000 ÷ $3,100,000

= $0.70

Therefore, the company's predetermined overhead rate is 0.70

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