Harris Fabrics computes its predetermined overhead rate annually on the beginnin

Question

Harris Fabrics computes its predetermined overhead rate annually on the beginning of the year, it estimated that 43,000 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 basis of direct labor-hours. At the arris's actual manufacturing overhead for the year was $726, 147 and its actual total direct labor was 43,500 hours. Required: Compute the company's predetermined overhead rate for the ye places.) ar. (Round your answer to 2 decimal per DLH Hints References eBook&Resources; Hint#1 Check my work

Explanation / Answer

Total overhead estimated=Variable overhead+Fixed overhead

=(2*43000)+563000

=$649000

Hence predetermined overhead rate=Total overhead estimated/Total direct labor hours

=(649000/43000)

which is equal to

=15.09 per DLH(Approx).

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