Omni Products computes its predetermined overhead rate annually on the basis of

Question

Omni Products computes its predetermined overhead rate annually on the basis of direct labor hours (DLH). The beginning of the year, it est. that 34,000 DLH would be required for the period's estimated level of production. They also est. $548,000 of fixed manufacturing overhead expenses for the coming period & variable manufacturing overhead of $2.00 per DLH. Their actual manufacturing overhead for the year was $681,984 & its actual DLH were 34,500 hours. What is the Predetermined Overhead Rate $$$.$$ per DLH?

Explanation / Answer

To find the rate, is estimated fixed manufacturing overhead expenses divided by estimated dlh,

548,000/34,000 = 16.11

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