Harrls Fabrics computes Its plantwide predetermined overhead

Harrls Fabrics computes Its plantwide predetermined overhead rate annually on the basls of direct labor-hours. At the beginning of the ar, it estimated that 34,000 direct labor-hours would be required for the period\'s estimated level of p estimated $573,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing direct labor-hour. Harris\'s actual manufacturing hours. on. The company also of $4.00 per overhead cost for the year was $772.901 and its actual total direct labor was 34,500 Compute the company\'s plantwide predetermined overhead rate for the year. (Round your answer to 2 per DLH

Solution

Estimated fixed manufacturing overhead

$         573,000

Add: Estimated variable manufacturing overhead ($ 4 x 34,000)

$         136,000

Estimated total manufacturing overhead

$         709,000

Predetermined overhead rate = Estimated total manufacturing overhead/ Estimated total direct labor

= $ 709,000/34,000 = $ 20.85

      

Estimated fixed manufacturing overhead	$         573,000
Add: Estimated variable manufacturing overhead ($ 4 x 34,000)	$         136,000
Estimated total manufacturing overhead	$         709,000