QUESTION 1 5 Jonathan Corporation uses a predetermined overhead rate based on di

Question

QUESTION 1 5 Jonathan Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for nekt year: Direct materials 6,000 $20.000 15.000 25,000 Direct labor Rent on factory building. Sales Salaries. Depreciation on factory equipment.8,000 Indirect labor s 12.000 15.000 Production supervisor's salary... Jonathan estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be

Explanation / Answer

Predetermined overhead rate = Estimated total manufacturing overhead cost / Estimated total amount of the allocation base = $50000/$20000 = $2.50

Estimated manufacturing overhead cost:

Rent on factory building

$15000

Depreciation on factory equipment

$8000

Indirect labor

$12000

Production supervisor's salary

$15000

Total manufacturing overhead cost

$50000

Rent on factory building

$15000

Depreciation on factory equipment

$8000

Indirect labor

$12000

Production supervisor's salary

$15000

Total manufacturing overhead cost

$50000

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