Question

Marquis Company estimates that annual manufacturing overhead costs will be $900,000. Estimated annual operating activity bases are direct labor cost $500,000, direct labor hours 50,000, and machine hours 100,000.Compute the predetermined overhead rate for each activity base. (Round answers to 2 decimal places, e.g. 10.50% or 10.50.)Overhead rate per direct labor cost _____ %Overhead rate per direct labor hour $ _____Overhead rate per machine hours $ _____

Answer 1

Answer:

$18.00

Explanation:

Overhead rate = Estimated Overheads ÷ Estimated Activity

                        = $900,000 ÷ 50,000

                        = $18.00

Therefore,

Overhead rate per direct labor hour is $18.00