Hunks Textiles computes its plant wide predetermined overhead rate annually based on direct labor hours. At the beginning of the year, the company estimated 42,500 direct labor hours for the projected production level. The company also estimated $685,000 in fixed manufacturing overhead costs and variable manufacturing overhead of $2.40 per direct labor hour. During the year, actual manufacturing overhead costs were $815,200, and actual total direct labor was 43,100 hours. Compute the company's plant wide predetermined overhead rate for the year.

Hunks Textiles computes its plant wide predetermined overhead rate annually based on direct labor hours. At the beginning of the year, the company estimated 42,500 direct labor hours for the projected production level. The company also estimated $685,000 in fixed manufacturing overhead costs and variable manufacturing overhead of $2.40 per direct labor hour. During the year, actual manufacturing overhead costs were $815,200, and actual total direct labor was 43,100 hours. Compute the company's plant wide 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

Section: Chapter Questions

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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A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following Independent allocation bases? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000
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