Q7. Cabat Company manufactures two products, Product C and Product D. The compan

Question

Q7.

Cabat Company manufactures two products, Product C and Product D. The company estimated it would incur $178,910 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period’s operations appear below:

Compute the predetermined overhead rate under the current method. (Round your answer to 2 decimal places.

Cabat Company manufactures two products, Product C and Product D. The company estimated it would incur $178,910 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period’s operations appear below:

Explanation / Answer

Total Direct Labor Hours = 5005+2745 i.e 7750

Total Overhead Cost = 178910

Overhead Rate Per Hour = 178910/7750 i.e 23.0852 hours

Particulars Product C Product D Volume 3850 3050 Direct Labour / Unit 1.3 0.9 Total Labor Hours 5005 2745

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