Chapter 2 Assignment i Saved Help Save & 1 Harris Fabrics computes its plantwide

Question

Chapter 2 Assignment i Saved Help Save & 1 Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 40,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $580,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4.00 per direct labor-hour. Harris's actual manufacturing overhead cost for the year was $814,050 and its actual total direct labor was 40,500 hours. 12.5 points Skipped Required Compute the company's plantwide predetermined overhead rate for the year. (Round your answer to 2 decimal places.) eBook Hint Print References ete ined overhead per DLH

Explanation / Answer

Total variable overhead estimated=(4*40,000)=$160,000

Total overhead=(580,000+160,000)=$740,000

Hence

Predetermined overhead rate=(Total overhead/Total estimated direct labor hours)

=($740,000/40,000)

=$18.50 per DLH.

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