Direct labor cost is used to allocate manufacturing overhead to work-in-process.

Question

Direct labor cost is used to allocate manufacturing overhead to work-in-process. the budgeted overhead is $600,000 and the company expects to use 5,000 direct labor hours to make 20,000 units of product. If the average wage rate is $20 per hour, what is the predetermined rate used to allocate overhead to Work-in-Process? Direct labor cost is used to allocate manufacturing overhead to work-in-process. the budgeted overhead is $600,000 and the company expects to use 5,000 direct labor hours to make 20,000 units of product. If the average wage rate is $20 per hour, what is the predetermined rate used to allocate overhead to Work-in-Process? Direct labor cost is used to allocate manufacturing overhead to work-in-process. the budgeted overhead is $600,000 and the company expects to use 5,000 direct labor hours to make 20,000 units of product. If the average wage rate is $20 per hour, what is the predetermined rate used to allocate overhead to Work-in-Process?

Explanation / Answer

Particulars Amt Wage Rate 20 Overhead WN Below 120 Rate Charged to WIP 140 Working Note Overhead (A) 600000 No of Hours (B) 5000 Per Hour Rate (A/B) 120

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