2.00 points Exercise 3-1 Compute the Predetermined Overhead Rate [LO3-1] Harris

Question

2.00 points Exercise 3-1 Compute the Predetermined Overhead Rate [LO3-1] Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 26,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $524,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour Harris's actual manufacturing overhead for the year was $632,127 and its actual total direct labor was 26,500 hours. Congule the company's predetermined overthead rate for the ear (Round yodkt answer to 2 decimal Required: Compute the company's predetermined overhead rate for the year. (Round youd answer to 2 decimal places.) ermined overhead per DLH

Explanation / Answer

3-1) Predetermine overhead rate = (524000/26000)+2 = 22.15 per labour hour

3-3) Total manufacturing cost assigned :

Manufacturing overhead applied = (55/11*23) = 115

Manufacturing cost assigned = (220+55+115) = 390

Average cost per unit = 390/80 = 4.88 per unit

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