The manufacturing overhead budget at Cardera Corporation is based on budgeted di
ID: 2491934 • Letter: T
Question
The manufacturing overhead budget at Cardera Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,000 direct labor-hours will be required in January. The variable overhead rate is $9.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $114,400 per month, which includes depreciation of $18,180. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for January should be:
Explanation / Answer
Predetermined ovehead rate = variable + fixed
= $9.60 + 114,400/8,000
= 9.60 +14.30
=23.90 per hour
Predetermined ovehead rate = variable + fixed
= $9.60 + 114,400/8,000
= 9.60 +14.30
=23.90 per hour
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