The manufacturing overhead budget at pendley corporation is based on budgeted direct labor-hours. the direct labor budget indicates that 7,700 direct labor-hours will be required in august. the variable overhead rate is $7.90 per direct labor-hour. the company's budgeted fixed manufacturing overhead is $147,840 per month, which includes depreciation of $24,930. all other fixed manufacturing overhead costs represent current cash flows. the company recomputes its predetermined overhead rate every month. the predetermined overhead rate for august should be:

Question

Julianne Barry

Business

8 January, 01:20

The manufacturing overhead budget at pendley corporation is based on budgeted direct labor-hours. the direct labor budget indicates that 7,700 direct labor-hours will be required in august. the variable overhead rate is $7.90 per direct labor-hour. the company's budgeted fixed manufacturing overhead is $147,840 per month, which includes depreciation of $24,930. all other fixed manufacturing overhead costs represent current cash flows. the company recomputes its predetermined overhead rate every month. the predetermined overhead rate for august should be:

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Talon Livingston · Answer 1

Total variable overhead cost

7,700*7.9

=60,830

Total manufacturing overhead cost

60,830+147,840

=208,670

Predetermined oH rate

208,670:7,700

=27.1