usinessCourse Menu Calculate and Use Overhead Rate During th

usinessCourse Menu Calculate and Use Overhead Rate During the coming accounting year, Baker Manufacturing, Inc., anticipates the following costs, expenses, and operating data Direct material (16,000 lb.) Direct labor (8$15.00/hr) Indirect material Indirect labor Sales commissions Factory administration Non factory administrative expenses Other manufacturing overhead* s 120,000 210,000 18,000 33,000 51,000 24,000 30,000 72,000 Provides for operating 52,500 machine hours a. Calculate the predetermined manufacturing overhead rate for the coming year for each of the following application bases: (1 direct labor hours, (2) direct labor costs, and (3) machine hours. Round direct labor hours and machine hours answers to two decimal places, when applicable. Round direct labor costs to the nearest one decimal place percentage, when applicable (example: 76.4%). Manufacturing overhead rate Application base Direct labor hours Direct labor costs Machine hours in requirement a, determine the proper application of manufacturing overhead to job 63, to which 24 direct labor hours, $225 of direct labor cost, and 60 machine hours have been charged. 2 3 4 5 6

Solution

a A B C= A/B Application base Manf OH rate Overhead Base amount Rate Direct labor hours                 5.36 75000 14000          5.36 Direct labor costs 35.71% 75000 210000 35.71% Machine hours                 1.43 75000 52500          1.43 b A B C= A*B Application base Manf OH rate Driver Rate Amount Direct labor hours             128.57 24                5.36     128.57 Direct labor costs               80.36 225 36%        80.36 Machine hours               85.71 60                1.43        85.71 Manufacturing overhead Indirect material 18000 Indirect labor 33000 Factory administration 24000 Fixed manf overhead 75000