Ask Question
8 November, 14:33

Hyu Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 55,400 labor-hours. The estimated variable manufacturing overhead was $3.12 per labor-hour and the estimated total fixed manufacturing overhead was $1,230,440. The actual labor-hours for the year turned out to be 56,000 labor-hours. The predetermined overhead rate for the recently completed year was closest to:

+4
Answers (1)
  1. 8 November, 14:54
    0
    The predetermined overhead rate for the recently completed year was $25.33

    Explanation:

    The formula to compute the predetermined overhead rate is shown below:

    Predetermined overhead rate = (Total estimated manufacturing overhead) : (estimated direct labor-hours)

    where,

    Total estimated manufacturing overhead = Estimated total fixed manufacturing overhead + estimated variable manufacturing overhead rate * estimated labor hours

    = $1,230,440 + $3.12 * 55,400 hours

    = $1,230,440 + $172,848

    = $1,403,288

    Now put these values to the above formula

    So, the rate would equal to

    = $1,403,288 : 55,400 hours

    = $25.33
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Hyu Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers