Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year, it was estimated that 34,000 direct labor hours would be required for the period's estimated level of production. The company also estimated $599,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3 per direct labor hour. Harris's actual manufacturing overhead for the year was $768,234 and its actual total direct labor was 34,500 hours. Required: Compute the company's predetermined overhead rate for the year.

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter7: The Master Budget And Flexible Budgeting
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Problem 23Q: If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of...
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Harris Fabrics computes its predetermined overhead rate
annually on the basis of direct labor hours. At the
beginning of the year, it was estimated that 34,000 direct
labor hours would be required for the period's estimated
level of production. The company also estimated
$599,000 of fixed manufacturing overhead expenses for
the coming period and variable manufacturing overhead
of $3 per direct labor hour. Harris's actual manufacturing
overhead for the year was $768,234 and its actual total
direct labor was 34,500 hours.
Required:
Compute the company's predetermined overhead rate for
the year.
Transcribed Image Text:Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year, it was estimated that 34,000 direct labor hours would be required for the period's estimated level of production. The company also estimated $599,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3 per direct labor hour. Harris's actual manufacturing overhead for the year was $768,234 and its actual total direct labor was 34,500 hours. Required: Compute the company's predetermined overhead rate for the year.
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