Homework Saved Help Exercise 2-1 Compute a Predetermined Overhead Rate [LO2-1) H
ID: 2393238 • Letter: H
Question
Homework Saved Help Exercise 2-1 Compute a Predetermined Overhead Rate [LO2-1) Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 37,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $523,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Harris's actual manufacturing overhead cost for the year was $706,318 and its actual total direct labor was 37,500 hours. Required: Compute the company's plantwide predetermined overhead rate for the year. (Round your answer to 2 decimal places.) per DLH Prev 1 of 4l!Explanation / Answer
Solution :
Predetermined overhead rate=
Fixed manufacturing overhead per DLH
+ Variable manufacturing overhead per DLH
= $523,000/37,000 + $3.00
= $17.135 ( rounded off as $17.14)
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