Capalbo Corporation bases its predetermined overhead rate on the estimated labor

Question

Capalbo Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 62,000 labor-hours. The estimated variable manufacturing overhead was $2.88 per labor-hour and the estimated total fixed manufacturing overhead was $1,792,360. The actual labor-hours for the year turned out to be 62,500 labor-hours. The predetermined overhead rate for the recently completed year was closest to:

Explanation / Answer

The predetermined overhead rate for the recently completed year=62,000 labor-hours* $2.88 per labor-hour +fixed manufacturing overhead was $1,792,360/62,000 labor-hours=$31.79 per direct labor hour.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

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