Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

Escatel Corporation bases its predetermined overhead rate on the estimated labor

ID: 2427376 • Letter: E

Question

Escatel Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. Data for the most recently completed year appear below.

Estimates made at the beginning of the year

Estimated labor hours

25,000

Estimated variable manufacturing overhead

$7.10

per labor hour

Estimated total fixed manufacturing overhead

$625,000

Actual labor hours for the year

28,000



Required:

Compute the company's predetermined overhead rate for the recently completed year.

Estimates made at the beginning of the year

Estimated labor hours

25,000

Estimated variable manufacturing overhead

$7.10

per labor hour

Estimated total fixed manufacturing overhead

$625,000

Actual labor hours for the year

28,000

Explanation / Answer

Predetermined Fixed Overhead = Total estimated Fixed Manufacturing over heads / Estimated labour hours = 625000/25000 = 25 per Hour Add: Estimated Variable OH Rate           = 7.1 Per Hour Total Predetermined Over head                                         Rate               = 32.1 Per hour

Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote