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

Question

Logan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 37,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $563,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. Logan's actual manufacturing overhead for the year was $707,483 and its actual total direct labor was 37,500 hours.

Required:

Compute the company's predetermined overhead rate for the year. (Round your answer to 2 decimal places.) (per DLH)

Explanation / Answer

predetermined overhead rate $ Variable manufacturing overhead 2.00 fixed MOH rate (563000/37000)= 15.22 predetermined overhead rate 17.22 answer

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