Harris Fabrics computes its plantwide predetermined overhead

Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 36,000 direct labor-hours would be required for the period\'s estimated level of production. The company also estimated $512,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4.00 per direct labor-hour. Harris\'s actual manufacturing overhead cost for the year was $728,986 and its actual total direct labor was 36,500 hours. Required: Compute the company\'s plantwide predetermined overheed rate for the year (Round your answer to 2 decimal places.) per DLH

Solution

Predetermined overhead rate = 4+(512000/36000)= $18.22 per DLH