Question

Daget Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $365,220. At the end of the year, actual direct labor-hours for the year were 24,000 hours, manufacturing overhead for the year was overapplied by $9,140, and the actual manufacturing overhead was $362,380. The predetermined overhead rate for the year must have been closest to:

Answer 1

$15.48

Step-by-step explanation:

The computation of the predetermined overhead rate is shown below:

Predetermined overhead rate = (Manufacturing overhead) ÷ (Direct labor-hours)

where,

Manufacturing overhead equals to

= Actual manufacturing overhead + over applied manufacturing overhead

= $362,380 + $9,140

= $371,520

So, the rate is

= $371,520 ÷ 24,000 hours

= $15.48