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Norma-Jean [14]
3 years ago
10

Tampa Company has the following information: Total estimated manufacturing overhead costs $300,000 Total estimated direct labor

costs 900,000 Actual direct labor costs 60,000 Actual manufacturing overhead costs 310,000 What is the predetermined overhead allocation rate based on direct labor costs as a single plantwide rate?
Business
1 answer:
Anarel [89]3 years ago
6 0

Answer: 33.3%

Explanation: The predetermined overhead rate allocates the manufacturing overhead to products. This is based on an estimate, as it is done at the beginning of the financial year. It uses an allocation base, which is usually a cost driver. A cost driver is a type of activity that causes a change in the cost of said activity. Examples of cost drivers usually used are: direct labour hours or machine hours.

The formula for calculating the predetermined overhead rate is:

Total estimated overhead costs ÷ total estimated overhead allocation base (estimated direct labour costs is used)

300 000 ÷ 900 000 = 0.33333 × 100 = 33.3%

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A project that costs $1,900 to install will provide annual cash flows of $500 for the next 5 years. The firm accepts projects wi
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A. 3.8 YEARS

B YES

C $325.91

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To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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