Question

Here are selected data for Wilson​ Company: Estimated manufacturing overhead ​ $259,650 Factory utilities ​ $30,200 Estimated labor hours ​ 35,000 Indirect labor ​ $22,400 Actual direct labor hours ​ 36,000 Sales commissions ​ $53,700 Estimated direct labor cost ​ $329,600 Factory rent ​ $47,700 Actual direct labor cost ​ $320,600 Factory property taxes ​ $28,100 Factory depreciation ​ $65,400 Indirect materials ​ $33,000 If the company allocates overhead based on direct labor​ cost, what is the predetermined manufacturing overhead​ rate?

Answer 1

Answer:

Predetermined manufacturing overhead rate= 0.788

Explanation:

Giving the following information:

Estimated manufacturing overhead ​ $259,650

Factory utilities ​ $30,200

Estimated labor hours ​ 35,000

Indirect labor ​ $22,400

Actual direct labor hours ​ 36,000

Sales commissions ​ $53,700

Estimated direct labor cost ​ $329,600

Factory rent ​ $47,700

Actual direct labor cost ​ $320,600

Factory property taxes ​ $28,100

Factory depreciation ​ $65,400

Indirect materials ​ $33,000

Predetermined manufacturing overhead rate= total estimated manufacturing overhead/ total amount of allocation base

Predetermined manufacturing overhead rate= 259650/329600

Predetermined manufacturing overhead rate= 0.788