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elena-s [515]
3 years ago
14

MC Qu. 116 CWN Company uses a job order costing... CWN Company uses a job order costing system and last period incurred $70,000

of actual overhead and $100,000 of direct labor. CWN estimates that its overhead next period will be $85,000. It also expects to incur $100,000 of direct labor. If CWN bases applied overhead on direct labor cost, its predetermined overhead rate for the next period should be:
Business
1 answer:
-BARSIC- [3]3 years ago
4 0

Answer:

85%

Explanation:

With regards to the information above, predetermined overhead will be computed as;

Predetermined overhead = (Estimated overhead / Expected labor cost) × 100

Estimated overhead = $85,000

Expected labor cost = $100,000

Then,

Predetermined overhead = ($85,000 / $100,000) × 100

Predetermined overhead = 85%

Therefore, its predetermined overhead rate for the next period should be 85%

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