Darnell Industries uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $450,000. At the end of the year, actual direct labor-hours for the year were 30,000 hours, manufacturing overhead for the year was overapplied by $12,000, and the actual manufacturing overhead was $440,000. The predetermined overhead rate for the year must have been closest to:

Darnell Industries uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $450,000. At the end of the year, actual direct labor-hours for the year were 30,000 hours, manufacturing overhead for the year was overapplied by $12,000, and the actual manufacturing overhead was $440,000. The predetermined overhead rate for the year must have been closest to:

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 3EB: A company estimated 50,000 direct labor hours and $450,000 in overhead. The actual overhead was...

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If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?
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