Question

Based on this information, the predetermined overhead rate per direct labor dollar is

A. $1.67
B. $2.00
C. $2.40
D. $2.88

Answer 1

The predetermined overhead rate per direct labor dollar is $2.40.

Step-by-step explanation:

The predetermined overhead rate per direct labor dollar can be calculated by dividing the estimated manufacturing overhead costs by the estimated direct labor dollars. In this case, the estimated manufacturing overhead costs are $2,400 and the estimated direct labor dollars are $1,000. Therefore, the predetermined overhead rate per direct labor dollar is $2.40 (A).