Question

Item 1 Manufacturing overhead was estimated to be $629,300 for the year along with 20,300 direct labor hours. Actual manufacturing overhead was $569,415, actual labor hours were 21,600. The predetermined manufacturing overhead rate per direct labor hour would be:

Answer 1

Answer:

$31 per hour

Explanation:

The predetermined overhead rate is computed as

= Estimated manufacturing overhead / Estimated direct labor hours

Given that

Estimate manufacturing overhead = $629,300

Estimated direct labor hour = 20,300

Therefore,

Predetermined overhead rate

= $629,300 / 20,300

= $31 per hour