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    Plantwide predetermined overhead rates using labor

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    Direct material 2,500 pounds (.75 per pound)
    Direct labor 300 hours (7.50 per hour)
    Overhead per dept (est.) $6,000
    Direct labor (est.) 300 hours (200 in molding and 100 in firing)
    Machine hours (est.) 200 (50 in molding and 150 in firing)

    factory rent $3,000
    factory utilities $3,700
    advertising $2,500
    factory equipment depre $3,000
    sales commission $2,500
    $14,700 overhead

    Calculate a plantwide predetermined overhead rate using direct labor hours as the cost driver.
    Calculate a plantwide predetermined overhead rate using machine hours as the cost driver.
    Using the plantwide rate calculated on the basis of direct labor hours, how much overhead would be applied to a job requiring 25 direct labor hours?

    Using the plantwide rate calculated on the basis of machine hours, how much overhead would be applied to a job requiring 5 machine hours?

    Crystal is considering the use of department overhead rates. Assume that the cost driver for the molding department is machine hours.

    How much overhead would be applied to a job using 10 direct labor hours and 3 machine hours in the molding department and 4 direct labor hours and 2 machine hours in the firing department?

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    https://brainmass.com/business/labour-management-and-relations/plantwide-predetermined-overhead-rates-using-labor-336560

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    ANSWERS

    Calculate a plantwide predetermined overhead rate using direct labor hours as the cost driver.
    Plantwide predetermined overhead rate = Total overhead/direct labor hours = $14,700/300 hours = $49 per direct labor hour

    Calculate a plantwide predetermined overhead rate using machine hours as the cost ...

    Solution Summary

    Plantwide predetermined overhead rates using labor are examined.

    $2.19

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