Zephyros Corporation had estimated manufacturing overhead costs for the coming year to be $ 306 comma 000. The total estimated direct labor hours and machine hours for the coming year are 8 comma 000 and 13 comma 000 , respectively. Manufacturing overhead costs are allocated based on direct labor hours. What is the predetermined overhead allocation rate?

Question

Braylen Arellano

Business

31 May, 20:32

Zephyros Corporation had estimated manufacturing overhead costs for the coming year to be $ 306 comma 000. The total estimated direct labor hours and machine hours for the coming year are 8 comma 000 and 13 comma 000 , respectively. Manufacturing overhead costs are allocated based on direct labor hours. What is the predetermined overhead allocation rate?

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Answers (1)

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Hamza Deleon · Answer 1

Estimated manufacturing overhead rate = $38.25 per direct labor hour

Explanation:

Giving the following information:

Zephyros Corporation had estimated manufacturing overhead costs for the coming year to be $306,000. The total estimated direct labor hours for the coming year are 8,000

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 = 306,000/8,000 = $38.25 per direct labor hour