Harbor Manufacturing Inc. applies factory overhead based on direct labor hours. The company's preset overhead application formula estimated that $360,000 would be incurred and that 6,000 direct labor hours would be worked. During April 2022, the actual overhead incurred was $345,000, and the actual direct labor hours worked were 12,500 hours. Using this information, determine the standard overhead rate.

Harbor Manufacturing Inc. applies factory overhead based on direct labor hours. The company's preset overhead application formula estimated that $360,000 would be incurred and that 6,000 direct labor hours would be worked. During April 2022, the actual overhead incurred was $345,000, and the actual direct labor hours worked were 12,500 hours. Using this information, determine the standard overhead rate.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter3: Process Cost Systems

Section: Chapter Questions

Problem 4E: The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the...

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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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