22) The manufacturing overhead budget at Foshay Corporation is based on budgeted

Question

22) The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 5,800 direct labor-hours will be required in May. The variable overhead rate is $9:10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $104,400 per month, which includes depreciation of $8,120. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be: A) $9.10 B) $27.10 C) $18.00 D) $25.70

Explanation / Answer

Fixed manufacturing overhead rate = 104400/5800 = 18 per labour hour

Variable manufacturing overhead rate = 9.10 per labour hour

Total predetermine overhead rate = 18+9.10 = 27.10 per labour hour

so answer is b) $27.10

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.