Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $12.21 per hour. 2. Determine the amount of applied overhead if 19,000 actual hours are worked in the upcoming year.

Question

Carlos Dominguez

Business

20 October, 00:45

Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $12.21 per hour. 2. Determine the amount of applied overhead if 19,000 actual hours are worked in the upcoming year.

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Answers (1)

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Heidy Frye · Answer 1

Instructions are below.

Explanation:

We weren't provided with enough information to calculate the requirements. But, I will provide the formulas and a small example.

For example:

Estimated overhead for the period = $750,000

Estimated direct labor hours = 25,000

Actual hours = 19,000

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

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

Predetermined manufacturing overhead rate = 750,000/25,000

Predetermined manufacturing overhead rate = $30 per direct labor hour

Now, we can allocate overhead:

Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

Allocated MOH = 30*19,000

Allocated MOH = $570,000