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Predetermined Overhead Rate for Direct Labor Hours

Compute the Predetermined Overhead Rate [LO] Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year it estimated that its total manufacturing overhead would be $134,000 and the total direct labor would be 20,000 hours. Its actual total manufacturing overhead for the year was $123,900 and its actual total direct labor was 21,000 hours.

Required:

Compute the company's predetermined overhead rate for the year.

The predetermined overhead rate is computed as follows:

Round your answers to two decimal places. Include .00 if there are no cents.

Estimated total manufacturing overhead $ ____________
à·Estimated total direct labor hours (DLHs) ____________ DLHs

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=Predetermined overhead rate $ ____________ per DLH

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The predetermined overhead rate based on direct labor hours is calculated ...

Solution Summary

The solution explains how to calculate the predetermined overhead rate for Harris Fabrics

$2.19