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13 May, 19:28

Manufacturing overhead was estimated to be $591,600 for the year along with 20,400 direct labor hours. Actual manufacturing overhead was $551,820, and actual labor hours were 21,800. The predetermined manufacturing overhead rate per direct labor hour would be: Multiple Choice $27.05. $21.75. $29.00. $0.07.

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  1. 13 May, 19:47
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    Predetermined manufacturing overhead rate = $29

    Explanation:

    Given:

    Estimated manufacturing overhead = $591,600

    Estimated direct labor hours = 20,400

    Actual manufacturing overhead = $551,820

    Actual direct labor hours = 21,800

    Computation of predetermined manufacturing overhead rate:

    Predetermined manufacturing overhead rate = Estimated manufacturing overhead / Estimated direct labor hours

    Predetermined manufacturing overhead rate = $591,600 / 20,400

    Predetermined manufacturing overhead rate = $29

    Note: Actual manufacturing overhead and labor hours do not include in the computation of predetermined manufacturing overhead rate.
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