value 200 points The manufacturing overhead budget at Pendiey Corporation is bas

Question

value 200 points The manufacturing overhead budget at Pendiey Corporation is based on budgeted direct labor-hours. The direct labor budget Indicates that 6,400 direct labor-hours wil be required in August. The variable overhead rate is $8.80 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $119,680 per month, which includes depreclation of $24,930. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for August should be $27.50 O $880 O $18.70 O $24.00

Explanation / Answer

Fixed overhead /labor hour=(119680/6400)=$18.70

Hence Preddetrmined overhead rate=Fixed overhead+Variable overhead

=(8.8+18.7)

which is equal to

=$27.50

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