Question 1 Harris Fabrics computes its predetermined overhead rate annually on the basis of direct laborhours. At the beginning of the year, it estimated that 20,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $94,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing |.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Question 1
Harris Fabrics computes its
predetermined overhead rate
annually on the basis of direct
laborhours. At the beginning of
the year, it estimated that 20,000
direct labor-hours would be
required for the period's
estimated level of production. The
company also estimated $94,000
of fixed manufacturing overhead
expenses for the coming period
and variable manufacturing
overhead of $2.00 per direct
labor-hour. Harris's actual
manufacturing overhead for the
year was $123,900 and its actual
total direct labor was 21,000
hours.
Required:
Compute the company's
predetermined overhead rate for
the year.
Transcribed Image Text:Question 1 Harris Fabrics computes its predetermined overhead rate annually on the basis of direct laborhours. At the beginning of the year, it estimated that 20,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $94,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. Harris's actual manufacturing overhead for the year was $123,900 and its actual total direct labor was 21,000 hours. Required: Compute the company's predetermined overhead rate for the year.
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