Davidson\'s dolls had the following information in its work in process inventory

Question

Davidson's dolls had the following information in its work in process inventory account for june 2010:

Work in process inventory:

Debt Credit

Beginning balance 10,000 Transferred out 335,000
Materials added 150,000
labor (5,000 DLHs) 90,000
Applied overhead 120,000

all workers paid the same rate per hour. facotry overhead is applied to work in process inventory on the basis of direct labor hours. the only work left in process at the end of the month had a total of 2.680 direct labor hours accumulated to date.

a. what is the total predtermined Overhad rate per direct labor hour?

Explanation / Answer

a) Predetermined overhead rate= applied overhead/actual DLH=120,000/5000= $24/DLH

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