contestada

harris fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. at the beginning of the year, it estimated that 25,000 direct labor-hours would be required for the period’s estimated level of production. the company also estimated $539,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. harris’s actual manufacturing overhead cost for the year was $665,805 and its actual total direct labor was 25,500 hours. required: compute the company’s plantwide predetermined overhead rate for the year. (round your answer to 2 decimal places.)

Respuesta :

arshikhan8123

Given:

Direct labor-hours = 25,000

Fixed manufacturing overhead cost = $539,000

variable manufacturing overhead = $3.00 per direct labor-hour

Actual manufacturing overhead cost for the year = $665,805

Actual total direct labor = 25,500 hours

Now,

Total Estimated Manufacturing Overhead = $539,000 + ( $3 × 25,000 )

= $614,000

And,

predetermined overhead rate = Estimated Manufacturing Overhead / Estimated direct labor hours

predetermined overhead rate = $614,000 / 25,000

predetermined overhead rate = $24.56 per direct labor hour

The predetermined overhead rate is calculated by dividing the estimated manufacturing overhead cost by the estimated activity basis at the beginning of the accounting period. A predetermined overhead rate is then applied to the production to help determine the standard cost of the product.

How do you calculate a predetermined overhead rate?

You can calculate a predetermined overhead rate by dividing the manufacturing overhead cost by the performance driver. For example, if the activity factor is machine hours, divide the overhead cost by the estimated number of machine hours.

Learn more about predetermined overhead rate here:- https://brainly.com/question/26372929

#SPJ4

Otras preguntas