Dehner Corporation uses a job-order costing system with a single plantwide prede

Question

Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data Total direct labor-hours Total fixed manufacturing overhead cost Variable nanufacturing overhead per direct labor-hour 40,000 96,000 $ 3.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job Total direct labor-hours Direct materials Direct labor cost 20 100 755 $4,000 The predetermined overhead rate is closest to: $2.40 per direct labor-hour $3.00 per direct labor-hour $8.40 per direct labor-hour $5.40 per direct labor-hour

Explanation / Answer

Solution:- $5.40 per direct labor-hour

Explanation:-

Please Rate or comment if you have any doubt regarding this solution.

Estimated Fxed manufacturing overhead $ 96,000 Estimated variable manufacturing overhead (40,000 * $3) $ 120,000 Estimated total manufacturing overhead cost $ 216,000 Divide by Estimated total machine-hours (MHs) 40,000 = Predetermined overhead rate $ 5.4

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