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Variable manufacturing overhead rate

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The Steimer Company bases its flexible budget for manufacturing overhead on direct labor-hours (DLH). The company uses the following information in its flexible budget:

Supplies 0.45 per DLH
Utilities 9,000 per month plus 0.30 per DLH
Insurance 3,000 per month
Indirect labor 15,000 per month plus 0.25 per DLH
Depreciation 18,000 per month

The company uses standard costing and uses 50,000 DLHs as its denominator activity.
Reference: 11-1

The variable manufacturing overhead rate per direct labor-hour is:

1.00
1.25
0.55
0.45

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This provides the steps to calculate the variable manufacturing overhead rate.

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