The manufacturing overhead budget at Latronica Corporation is Based on budgeted

Question

The manufacturing overhead budget at Latronica Corporation is Based on budgeted direct labor-hours The direct labor budget indicates that 7.500 direct labor-hours wil be required in August The vanatte overhead rate is $770 per direct labor-hour The company's budgeted fixed manufactunng ovemead is $151500 per month, which includes depreciation of $24,910 All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overnead rate every month The predetermined overhead rate for August should be:

Explanation / Answer

Predetermined Overhead Rate = Estimated Manufacturing overhead cost / Estimated total units in the allocation base

= 151500 / 7500 = $20.20

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