Tiger Furnishings produces two models of cabinets for home theater components, t

Question

Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow:

Required:

Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor-hours to allocate overhead costs. (Round your answer to 2 decimal places.)

Basic Dominator Total Units produced 900 450 1,350 Machine-hours 3,400 1,200 4,600 Direct labor-hours 2,900 1,200 4,100 Direct materials costs $ 10,400 $ 3,550 $ 13,950 Direct labor costs 57,700 30,700 88,400 Manufacturing overhead costs 145,140 Total costs $ 247,490

Explanation / Answer

Predetermined overhead rate = Manufacturing overhead costs / Direct labor-hours = 145140/4100= $35.40 / Direct labor-hour

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