Predetermined overhead rate
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My company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for the next year:
Direct materials...$5,000
Direct labor...$19,000
Rent of factory building...$16,000
Sales salaries...$24,000
Depreciation on factory equipment...$7,000
Indirect labor...$11,000
Production supervisor's salary...$14,000
We estimate that 24,000 direct labor hours will be worked during the year. The predetermined overhead rate per hour will be:
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Solution Summary
The solution explains how to calculate the predtermined overhead rate
Solution Preview
The manufacturing overhead will be all manufacturing costs other than the direct material and direct labor cost. The other manufacturing ...
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