On Chapter 6 Problem 3 in Cost, the formula should be Estimated Overhead/Estimated Allocation Base. When I put in 210,490 / 88,700 = 2.37. This is the wrong answer. I need ideas on the correct way to work the problem, please. Thank you and thank you for your time. **Overview of Overhead Rate Calculation for Tiger Furnishings**Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. The following operational data and costs for March are provided:| | Basic | Dominator | Total ||----------------------|--------|-----------|----------|| Units produced | 950 | 350 | 1,300 || Machine-hours | 4,300 | 2,000 | 6,300 || Direct labor-hours | 3,800 | 2,400 | 6,200 || Direct materials costs| $10,600| $3,400 | $14,000 || Direct labor costs | $56,800| $31,900 | $88,700 || Manufacturing overhead costs | | | $210,490 |**Total costs:** $313,190**Task Requirement:**Compute the predetermined overhead rate, using direct labor costs as the basis for allocating overhead. *Note: Please round your answer to two decimal places.***Graphical Features:**- The table lists production data and associated costs for two product lines.- A section is designated for calculating the predetermined overhead rate as a percentage of direct labor costs. This exercise helps understand cost allocation methods in manufacturing settings, particularly the use of direct labor costs to distribute overhead costs effectively.

Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow: Basic Dominator Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Total 1,300 6,300 6,200 $ 14,000 88,700 210,490 950 350 4,300 3,800 $10,600 56,800 2,000 2,400 $ 3,400 31,900 Manufacturing overhead costs Total costs $313,190 Required: Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor costs to allocate overhead costs. (Round your answer to 2 decimal places.) Predetermined overhead rate % of direct labor cost

Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow: Basic Dominator Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Total 1,300 6,300 6,200 $ 14,000 88,700 210,490 950 350 4,300 3,800 $10,600 56,800 2,000 2,400 $ 3,400 31,900 Manufacturing overhead costs Total costs $313,190 Required: Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor costs to allocate overhead costs. (Round your answer to 2 decimal places.) Predetermined overhead rate % of direct labor cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

100%

On Chapter 6 Problem 3 in Cost, the formula should be Estimated Overhead/Estimated Allocation Base. When I put in 210,490 / 88,700 = 2.37. This is the wrong answer. I need ideas on the correct way to work the problem, please. Thank you and thank you for your time.

**Overview of Overhead Rate Calculation for Tiger Furnishings**

Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. The following operational data and costs for March are provided:

| | Basic | Dominator | Total |
|----------------------|--------|-----------|----------|
| Units produced | 950 | 350 | 1,300 |
| Machine-hours | 4,300 | 2,000 | 6,300 |
| Direct labor-hours | 3,800 | 2,400 | 6,200 |
| Direct materials costs| $10,600| $3,400 | $14,000 |
| Direct labor costs | $56,800| $31,900 | $88,700 |
| Manufacturing overhead costs | | | $210,490 |

**Total costs:** $313,190

**Task Requirement:**
Compute the predetermined overhead rate, using direct labor costs as the basis for allocating overhead.

*Note: Please round your answer to two decimal places.*

**Graphical Features:**
- The table lists production data and associated costs for two product lines.
- A section is designated for calculating the predetermined overhead rate as a percentage of direct labor costs.

This exercise helps understand cost allocation methods in manufacturing settings, particularly the use of direct labor costs to distribute overhead costs effectively.

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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