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Question

Mailings Review View DesignLayout 1 Normal No Spaci.. Heading 1 Heading 2Title Su Paragraph Styles 7. Below is information from the budget of the J. Tumer Company at the beginning of the current year Estimated factory overhead timated direct labor hours timated machine hours timated direct labor cost 60,000 hours 41,250 hours $825,0 Actual factory overhead incurred during the year $144,000 Calculate the predetermined overhead rate if the company uses the following as a basis: (a) Direct labor hours. (Hint The POHR for this item should be greater than $2.00 but less than $3.00 per DLH) (b) Direct labor cost. (c) Machine hours. (3 points total) 5 6 7 8 9 0

Explanation / Answer

a.overhead rate based on direct labour hours = estimated factory overhead / direct labour hours

=>$132,000 / 60,000 hours

=>$2.20 per hour.

b.based on direct labour cost = estimated factory overhead / estimated direct labour cost

=>$132,000 / $825,000

=>0.16

=>16 % of direct labour cost.

c.based on machine hours = estimated factory overhead / estimated machine hours

=>$132,000 / 41,250 hours

=>$3.20 per hour.

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