Bakker Corporation applies manufacturing overhead on the basis of direct labor-h

Question

Bakker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $68,850 and 2,700 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $67,150 and actual direct labor-hours were 2,600.

The predetermined overhead rate for the year was closest to:

1. $26.50

2. $25.83

3. $24.90

4. $25.50

Bakker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $68,850 and 2,700 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $67,150 and actual direct labor-hours were 2,600.

The predetermined overhead rate for the year was closest to:

1. $26.50

2. $25.83

3. $24.90

4. $25.50

Explanation / Answer

4. $25.50 Statement showing computations Particulars Amount Total estimated overhead                  68,850.00 Estimated direct labor-hours                    2,700.00 Predetermined overhead rate = 68,850/2,700                          25.50

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