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23 July, 06:16

Midwest Corporation has provided the following data concerning manufacturing overhead for 2020:

Estimated manufacturing overhead for the year $ 37,080

Estimated direct labor hours for the year 2,060

Two jobs were worked on during the year: Job A-101 and Job A-102. The number of direct labor-hours spent on Job A-101 and Job A-102 were 1,230 and 1,600, respectively. The actual manufacturing overhead was $43,600.

What is the predetermined manufacturing overhead rate per direct labor hour for the year?

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  1. 23 July, 06:41
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    Estimated manufacturing overhead rate = $18 per direct labor hour

    Explanation:

    Giving the following information:

    Estimated manufacturing overhead for the year $ 37,080

    Estimated direct labor hours for the year 2,060

    To calculate the estimated manufacturing overhead rate we need to use the following formula:

    Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

    Estimated manufacturing overhead rate = 37,080/2,060

    Estimated manufacturing overhead rate = $18 per direct labor hour
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