onnect IN pter 3 Homework Question 1 (of 1) value 10.00 points Harris Fabrics co

Question

onnect IN pter 3 Homework Question 1 (of 1) value 10.00 points Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 27,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $591,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $4.00 per direct labor-hour Harris's actual manufacturing overhead for the year was $754 569 and its actual total direct labor was 27,500 hours Required: Compute the company's predetermined overhead rate for the year. (Round your answer to 2 decimal places.) ed overhead per DLH Hints References eBook & Resources Hint #1 Check my work

Explanation / Answer

Answer 1.

Estimated Fixed Manufacturing Overhead = $591,000
Estimated Variable Manufacturing Overhead = $4.00 per DLH
Estimated DLHs = 27,000

Estimated Manufacturing Overhead = Estimated Fixed Manufacturing Overhead + Estimated Variable Manufacturing Overhead * Estimated DLHs
Estimated Manufacturing Overhead = $591,000 + $4.00 * 27,000
Estimated Manufacturing Overhead = $699,000

Predetermined Overhead Rate = Estimated Manufacturing Overhead / Estimated DLHs
Predetermined Overhead Rate = $699,000 / 27,000
Predetermined Overhead Rate = $25.89 per DLH

Answer 2.

Predetermined Overhead Rate = $22.40 per DLH
Actual DLHs = 12,000

Manufacturing Overhead applied = Predetermined Overhead Rate * Actual DLHs
Manufacturing Overhead applied = $22.40 * 12,000
Manufacturing Overhead applied = $268,800

Answer 3.

Direct Labor = $225
Direct Labor wage rate = $15.00 per hour

Direct Labor hours = Direct Labor / Direct Labor wage rate
Direct Labor hours = $225 / $15.00
Direct Labor hours = 15

Manufacturing Overhead = Predetermined Overhead Rate * Direct Labor hours
Manufacturing Overhead = $19.00 * 15
Manufacturing Overhead = $285

Total Manufacturing Cost = Direct Materials + Direct Labor + Manufacturing Overhead
Total Manufacturing Cost = $240 + $225 + $285
Total Manufacturing Cost = $750

Average Cost = Total Manufacturing Cost / Number of units
Average Cost = $750 / 60
Average Cost = $12.50 per unit

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