Skyland Fabrication Co. calculates its predetermined overhead rate annually using direct labor-hours as the allocation base. At the beginning of the year, it estimated that total manufacturing overhead would be $640,000, and total direct labor-hours would be 50,000 hours. At year-end, the actual manufacturing overhead incurred was $710,000, and actual direct labor-hours worked were 51,000 hours. What is Skyland Fabrication's predetermined overhead rate for the year?

Skyland Fabrication Co. calculates its predetermined overhead rate annually using direct labor-hours as the allocation base. At the beginning of the year, it estimated that total manufacturing overhead would be $640,000, and total direct labor-hours would be 50,000 hours. At year-end, the actual manufacturing overhead incurred was $710,000, and actual direct labor-hours worked were 51,000 hours. What is Skyland Fabrication's 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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