ipment. Therrien estimates total manufacturing overhead costs next year to be $1

Question

ipment. Therrien estimates total manufacturing overhead costs next year to be $1,500,000. Therrien also estimates Therrien Pools manufactures swimming pool equ will use 31,250 direct labor hours and incur $1,000,000 of direct labor cost next year. In addition, the machines are expected to be run for 37,500 hours Compute the predetermined manufacturing overhead rate for next year under the following independent situations: 1. Assume that the company uses direct labor hours as its manufacturing overhead allocation base. 2. Assume that the company uses direct labor cost as its manufacturing overhead allocation base. 3. Assume that the company uses machine hours as its manufacturing overhead allocaton base. 1. Compute the predetermined manufacturing overhead rate for next year assuming that the company uses direct labor hours as its manufacturing overhead allocation base. dentify the formula and compute the predetermined manufacturing overhead rate for next year using direct labor hours as the manufacturing Predetermined manufacturing overhead rate l per DL hour 2. Compute the prede termined manufacturing overhead rate for next year assuming that the company uses direct labor cost as its manufacturing overhead allocatiorn base. dentily the formula and compute the predetermined manudacturing overhead rate for next year using direct labor cost as the manufacturing overhead allocation base. Enter the rate as a whole percent. Predetermined manufacturing overhead rate % af DL cost

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount 1) Predetermined manufacturing overhead rate = Estimated total manufacturing overhead/ Estimated Direct Labour hours Predetermined manufacturing overhead rate = 1500,000/31,250                         48.00 per DL hour 2) Predetermined manufacturing overhead rate = Estimated total manufacturing overhead/ Estimated Direct Labour Cost Predetermined manufacturing overhead rate = 1500,000/1000,000*100 150.00% of DL Cost 3) Predetermined manufacturing overhead rate = Estimated total manufacturing overhead/ Estimated machine hours Predetermined manufacturing overhead rate = 1500,000/37,500                         40.00 per machine hour

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.