TB MC Qu. 04-36 Simmons Corporation bases its predetermined Sirmons Corporation

Question

TB MC Qu. 04-36 Simmons Corporation bases its predetermined Sirmons Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 80,000 labor-hours. The estimated variable manufacturing overhead was $10.29 per labor-hour and the estimated total fioxed manufacturing overhead was $1,504,000. The actual labor-hours for the year turned out to be 74,000 labor-hours. The predetermined overhead rate for the recently completed year was closest to: O $10.29 per labor-hour $28.82 per labor-hour O $18.80 per labor-hour O $2909 per labor-hour References TB MC Qu 04-36 Sirmons Corporation bases its Multiple Choice

Explanation / Answer

·         Fixed Predetermined Overhead rate = Estimated total fixed manufacturing overhead / Estimated overheads

= 1504000/80000 = 18.80

Variable predetermined overhead rate = $10.29

Predetermined Overhead rate = $18.80+10.29 =$29.09 per labor hour

Therefore option D is correct

2) 116500-(16500*7) = 1000 over applied

Option C is correct

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