Fancy Drapes is a small local manufacturing firm that makes curtains and blinds at low cost. Management is preparing budgets for the month, and is trying to determine the Overhead Budget amounts. Variable overhead is budgeted to be incurred at a rate of $7/direct labor hour (including utility usage, indirect materials, and indirect labor). Budgeted direct labor hours are 2,500 hours for the period. Fixed overhead amounts include the following: Rent $4,000; Factory supervisor salary $4,000; Depreciation $1,500; Insurance $2,500; and Property taxes $2,000.
What is the predetermined overhead rate (applied on the basis of direct labor hours)?

Question

Fancy Drapes is a small local manufacturing firm that makes curtains and blinds at low cost. Management is preparing budgets for the month, and is trying to determine the Overhead Budget amounts. Variable overhead is budgeted to be incurred at a rate of $7/direct labor hour (including utility usage, indirect materials, and indirect labor). Budgeted direct labor hours are 2,500 hours for the period. Fixed overhead amounts include the following: Rent $4,000; Factory supervisor salary $4,000; Depreciation $1,500; Insurance $2,500; and Property taxes $2,000. 
What is the predetermined overhead rate (applied on the basis of direct labor hours)?

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The Answer of Fancy Drapes is a small local manufacturing firm that makes curtains and blinds at low cost. Management is preparing budgets for the month, and is trying to determine the Overhead Budget amounts. Variable overhead is budgeted to be incurred at a rate of $7/direct labor hour (including utility usage, indirect materials, and indirect labor). Budgeted direct labor hours are 2,500 hours for the period. Fixed overhead amounts include the following: Rent $4,000; Factory supervisor salary $4,000; Depreciation $1,500; Insurance $2,500; and Property taxes $2,000. 
What is the predetermined overhead rate (applied on the basis of direct labor hours)?

Fancy Drapes Is a Small Local Manufacturing Firm That Makes