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 42.000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $502.000 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 $660,976 and its actual total direct labor was 42.500 hours. Compute the company's predetermined overhead rate for the year. (Round your answer to 2 decimal places. Omit the "$" sign in your response.).

Explanation / Answer

Predetermined overhead rate $13.95 per DLH Budgeted Overhead/Direct Labour Hours 502000/42000 hours for Fixed overhead+ $2 per direct labour hour is variable overhead 11.95+2 $13.95

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