In December 2016, Custom Mfg. established its predetermined overhead rate for jobs produced during 2017 by using the following cost predictions: overhead costs, $600,000, and direct materials costs, $300,000. At year-end 2017, the company's records show that actual overhead costs for the year are $1,032,900. Actual direct material cost had been assigned to jobs as follows. Jobs completed and sold $380,000 Jobs in finished goods inventory 77,000 Jobs in work in process inventory 55,000 Total actual direct materials cost $512,000 Determine the predetermined overhead rate for 2017.

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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Financial accounting

In December 2016, Custom Mfg. established its predetermined overhead rate for
jobs produced during 2017 by using the following cost predictions: overhead costs,
$600,000, and direct materials costs, $300,000. At year-end 2017, the company's
records show that actual overhead costs for the year are $1,032,900. Actual direct
material cost had been assigned to jobs as follows.
Jobs completed and sold
$380,000
Jobs in finished goods inventory 77,000
Jobs in work in process inventory 55,000
Total actual direct materials cost $512,000
Determine the predetermined overhead rate for 2017.
Transcribed Image Text:In December 2016, Custom Mfg. established its predetermined overhead rate for jobs produced during 2017 by using the following cost predictions: overhead costs, $600,000, and direct materials costs, $300,000. At year-end 2017, the company's records show that actual overhead costs for the year are $1,032,900. Actual direct material cost had been assigned to jobs as follows. Jobs completed and sold $380,000 Jobs in finished goods inventory 77,000 Jobs in work in process inventory 55,000 Total actual direct materials cost $512,000 Determine the predetermined overhead rate for 2017.
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