Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $215,000 and actual labor hours were 21,000.The predetermined overhead rate per direct labor hour would be:

Question

Quizplus · Accepted Answer

The predetermined overhead rate is calculated by dividing the estimated manufacturing overhead by the estimated amount of the allocation base, in this case, direct labor hours. So, $200,000 / 20,000 hours = $10.00 per direct labor hour.

Manufacturing Overhead Was Estimated to Be $200,000 for the Year