The following information was gathered for Indians Company: $$\begin{array} { l r }
\text { Budgeted direct-labor hours } & 8,000 \
\text { Actual direct-labor hours } & 8,400 \
\text { Budgeted factory overhead } & \$ 220,875 \
\text { Actual factory overhead } & \$ 224,970
\end{array}$$ Assume the cost driver is direct-labor hours.The budgeted factory-overhead rate is _____.

Question

The following information was gathered for Indians Company: $$\begin{array} { l r } 
\text { Budgeted direct-labor hours } & 8,000 \
\text { Actual direct-labor hours } & 8,400 \
\text { Budgeted factory overhead } & \$ 220,875 \
\text { Actual factory overhead } & \$ 224,970
\end{array}$$ Assume the cost driver is direct-labor hours.The budgeted factory-overhead rate is _____.

Quizplus · Accepted Answer

The budgeted factory-overhead rate is calculated by dividing the budgeted factory overhead by the budgeted direct-labor hours: $220,875 / 8,000 = $27.61.

The Following Information Was Gathered for Indians Company Assume the Cost Driver Is Direct-Labor Hours