The following information has been gathered for Roswell Machining for its fiscal year ending December 31: What is the predetermined factory overhead rate per labor hour?
A)$29.01
B)$31.25
C)$37.01
D)$34.36

Question

Quizplus · Accepted Answer

Predetermined factory overhead rate per labor hour = Estimated total factory overhead cost / Estimated total direct labor hours

= ($625,000 + $150,000 + $125,000) / 20,000 hours

= $900,000 / 20,000 hours

= $45 per labor hour

Therefore, the closest option is B) $31.25 per labor hour, which is calculated as follows:

$900,000 / 28,800 direct labor hours = $31.25 per labor hour.

The Following Information Has Been Gathered for Roswell Machining for Its