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19 November, 10:15

Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 34,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $599,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Harris's actual manufacturing overhead for the year was $768,234 and its actual total direct labor was 34,500 hours.

Required:

Compute the company's predetermined overhead rate for the year. (Round your answer to 2 decimal places.)

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  1. 19 November, 10:27
    0
    = $20.62

    Explanation:

    Given that

    overhead expenses = $599,000

    direct labor hours = 34,000

    overhead direct labor = 3

    The computation of predetermined overhead rate is given below : -

    = (Estimated manufacturing overhead expenses : direct labor hours) + variable manufacturing overhead direct labor

    = ($599,000 : 34,000) + 3

    = $17.62 + 3

    = $20.62
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