**Overhead Cost Calculation in Manufacturing****Overview:**Harris Fabrics calculates its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 43,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $534,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. Harris’s actual manufacturing overhead cost for the year was $694,634 and its actual total direct labor was 43,500 hours.**Required:**Compute the company’s plantwide predetermined overhead rate for the year. (Round your answer to 2 decimal places.)**Predetermined overhead rate:**\[ \_\_\_\_\_\_\_\_\_\_\_\_\_ \text{ per DLH} \]**Explanation:***Direct Labor-Hour (DLH) is a measure of labor input for producing goods.*1. **Estimated Data:** - **Estimated Direct Labor-Hours**: 43,000 hours - **Fixed Manufacturing Overhead Cost**: $534,000 - **Variable Manufacturing Overhead Rate**: $2.00 per DLH2. **Actual Data:** - **Actual Manufacturing Overhead Cost**: $694,634 - **Actual Total Direct Labor-Hours**: 43,500 hours**Calculation:**The predetermined overhead rate is determined using the following formula:\[ \text{Predetermined Overhead Rate} = \frac{\text{Estimated Fixed Overhead Cost} + (\text{Estimated DLHs} \times \text{Variable Overhead Rate})}{\text{Estimated DLHs}} \]**Steps:**1. Calculate the total estimated overhead cost: \[ \text{Total Estimated Overhead Cost} = \text{Fixed Overhead} + (\text{Estimated DLHs} \times \text{Variable Overhead Rate}) \] \[ \text{Total Estimated Overhead Cost} = \$534,000 + (43,000 \times 2.00) \] \[ \text{Total Estimated Overhead Cost} = \$534,000 + \$86,000 \] \[ \text{Total Estimated Overhead Cost} = \$620,000 \]2. Calculate the predetermined overhead rate: \[ \text

The plantwide overhead rate is a single overhead rate used by a company to allocate all of its…

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 43,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $534,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. Harris's actual manufacturing overhead cost for the year was $694,634 and its actual total direct labor was 43,500 hours. Required: Compute the company's plantwide predetermined overhead rate for the year. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH Che

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 43,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $534,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. Harris's actual manufacturing overhead cost for the year was $694,634 and its actual total direct labor was 43,500 hours. Required: Compute the company's plantwide predetermined overhead rate for the year. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH Che

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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