Dagger Corporation uses direct labor-hours in its predetermined overhead rate. A
ID: 2424551 • Letter: D
Question
Dagger Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $254,900. At the end of the year, actual direct labor-hours for the year were 18,500 hours, manufacturing overhead for the year was underapplied by $16,800, and the actual manufacturing overhead was $249,900. The predetermined overhead rate for the year must have been closest to: Please show calculations. Thank you.
$12.60
$13.26
$13.54
$11.73
Explanation / Answer
The correct answer is $12.60
Workings:
If the manufacturing overhead underapplied was $ 16,800, and the actual overhead cost is $ 249,900, then the standard manufacturing overhead cost was 249,900 - 16,800 = $ 233,100
Therefore the predetermined overhead rate was closest to 233,100 / 18,500 = $ 12.60
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.