Primara Corporation has a standard cost system in which it applies overhead to p

Question

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Compute the fixed portion of the predetermined overhead rate for the year. (Round Fixed portion of the predetermined overhead rate to 2 decimal places.)

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Explanation / Answer

Answer:

Pre-determined overhead rate = Total Budgeted Fixed overhead cost

--------------------------------------------------

Budgeted Standard Direct Labor hours

= 515,900 / 67,000

= $7.7 per Direct labor hour

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