Chapter 2, Problem 1E

Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year,estimated that 20,000 direct labor-hours would be required for the period’s estimated level of production The company also estimate $94,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor-hours. Harris’s actual manufacturing overhead cost for the year was $123,900 and its actual total direct labor was 21,000 hours.
Required:
Compute the company’s plantwide predetermined overhead rate for the year.