illard Company applies manufacturing overhead costs to products as a percentage

Question

illard Company applies manufacturing overhead costs to products as a percentage of direct labor dollars. Estimated and actual values of manufacturing overhead and direct labor costs are summarized here:

Compute the predetermined overhead rate. (Omit the "%" sign in your response.)

Calculate the rate at which the manufacturing overhead will be applied based ondirect labor cost. (Omit the "%" sign in your response.)

Estimated Actual Direct labor cost $ 480,000 $ 430,000 Manufacturing overhead 945,600 870,600

Explanation / Answer

Predetermined overhead rate = Estimated one = 945600/480000 = 197% Manufacturing overhead rate = Actual one = 870600/430000 = 202.47%

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