Richards Manufacturing estimates the following activity for the coming year: ⚫ expected production 20 000 units ⚫ expected direct labour hours 20 000 hours ⚫ expected manufacturing overhead $200 000. Manufacturing overhead is allocated on the basis of direct labour hours. At the end of the financial period, the following information was collected: ⚫ direct labour hours 18 000 hours ⚫ manufacturing overhead $240 000.  a. Calculate the predetermined manufacturing overhead rate at the beginning of the year.  b. Calculate the actual manufacturing overhead rate for the year.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Richards Manufacturing estimates the following activity for the coming year:

⚫ expected production 20 000 units

⚫ expected direct labour hours 20 000 hours ⚫ expected manufacturing overhead $200 000.

Manufacturing overhead is allocated on the basis of direct labour hours. At the end of the financial period, the following information was collected:

⚫ direct labour hours 18 000 hours ⚫ manufacturing overhead $240 000.


 a. Calculate the predetermined manufacturing overhead rate at the beginning of the year. 
b. Calculate the actual manufacturing overhead rate for the year.

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