Byrd Company produces one product a putter called GOPutter B

Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 130,000 units per year. The total budgeted overhead at normal capacity is $1,170,000 comprised of 390,000 of variable costs and $ 780,000 of fixed costs. Byrd applies overhead on the basis of direct labor hours. During the current year, Byrd produced 79,100 putters, worked 82,500 direct labor hours, and incurred varlable overhead costs of $ 142,380 and fixed overhead costs of 660,900 Compute the predetermined variable overhead rate and the predetermined fxed overhead rate. (Round answers to 2 decimal places, e.g. 2.75.) Variable Fixed Predetermined Overhead Rate LINK TO TEXT VIDEO: SIMILAR EXERCISE VIDEO: APPLIED SKILLS Attempts: o of 3 used SAVE FOR LATER S SUBMIT ANSWER

Solution

Calculate predetermine overhead rate :

	Variable	Fixed
Predetermined overhead rate	390000/130000 = $3 per labour hour	780000/130000 = $6 per labour hour