Larkin Industries bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 80,000 labor-hours. The estimated variable manufacturing overhead was $3.50 per labor-hour, and the estimated total fixed manufacturing overhead was $2,100,000. The actual labor-hours for the year turned out to be 80,500 labor-hours. The predetermined overhead rate for the recently completed year was closest to: a. $31.88 b. $32.88 c. $33.50 d. None of the above

Larkin Industries bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 80,000 labor-hours. The estimated variable manufacturing overhead was $3.50 per labor-hour, and the estimated total fixed manufacturing overhead was $2,100,000. The actual labor-hours for the year turned out to be 80,500 labor-hours. The predetermined overhead rate for the recently completed year was closest to: a. $31.88 b. $32.88 c. $33.50 d. None of the above

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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