Cacioppo Corporation bases its predetermined overhead rate o

Cacioppo Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 50,000 labor-hours. The estimated manufacturing overhead for the upcoming year is $100,000. The actual labor-hours for the year turned out to be 52,000 labor-hours. Required: Compute the company\'s predetermined overhead rate for the recently completed year.

Solution

Predetermined overhead rate = $100,000 / 50,000 labor-hours = $2.00 per labor-hour