Rustafson Corporation is a diversified manufacturer of consumer goods. The compa

Question

Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools Estimated Overhead Cost Activity Cost Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory Expected Activity $20,400 $ 2,500 $55,000 $6,800 $28,800 $78,000 $59,600 5,000 direct labor-hours 5,000 machine-hours 1,100 setups 200 orders 1,200 tests 3,900 packages 5,000 direct labor-hours 2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) Predetermined overhead $ 11.73 per DLH te

Explanation / Answer

Predetermined Overhead Rate = Total Overhead Cost / Total Direct Labor Hours

= ( $ 20,400 + $ 2,500 + $ 55,000 +$ 6,800 + $ 28,800 + $ 78,000 + $ 59,600) / 5,000 Direct Labor Hours

= $ 50.22 per Direct Labor Hour

Hence the correct answer is $ 50.22

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