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 42,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $511,000 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 $714,708 and its actual total direct labor was 42,500 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
Harris Fabrics computes its plantwide predetermined
Required:
Compute the company’s plantwide predetermined overhead rate for the year. (Round your answer to 2 decimal places.)
|
Overheads are considered as fixed and common expenses that should be allocated to the products on the basis of different methods. Activity level allocation is one of the best methods for allocation.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
