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27 May, 03:13

The following budget data are available for Sharp Company: Estimated direct labor hours 12,000 Estimated direct labor dollars $90,000 Estimated factory overhead costs $179,000 Actual direct labor hours 11,500 Actual direct labor dollars $92,000 Actual factory overhead costs $180,000.

If factory overhead is to be applied based on direct labor dollars, the predetermined overhead rate is

a. 199%

b.$15.65

c.$14.92

d. 196%

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  1. 27 May, 03:15
    0
    The correct anser is A. $1.99 per direct labor dollar.

    Explanation:

    Giving the following information:

    Estimated direct labor dollars $90,000

    Estimated factory overhead costs $179,000

    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 = 179,000/90,000 = $1.99 per direct labor dollar.
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