Stone Cliff Company manufactures custom-order furniture.During 2020, actual manufacturing overhead totaled $720,000.Based on the 2020 results, and projected production for 2021, management prepared the 2021 budget and estimated that manufacturing overhead would total $800,000.The estimated number of direct labor hours for 2021 is 50,000, and the estimated amount of direct labor cost is $1,000,000.The company plans to use direct labor hours as the basis to allocate overhead to jobs.During May and June 2021, employees worked on the following four jobs: What is the predetermined overhead rate that Stone Cliff will use to allocate overhead during 2021?

Question

Stone Cliff Company manufactures custom-order furniture.During 2020, actual manufacturing overhead totaled $720,000.Based on the 2020 results, and projected production for 2021, management prepared the 2021 budget and estimated that manufacturing overhead would total $800,000.The estimated number of direct labor hours for 2021 is 50,000, and the estimated amount of direct labor cost is $1,000,000.The company plans to use direct labor hours as the basis to allocate overhead to jobs.During May and June 2021, employees worked on the following four jobs:  What is the predetermined overhead rate that Stone Cliff will use to allocate overhead during 2021?

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The Answer of Stone Cliff Company manufactures custom-order furniture.During 2020, actual manufacturing overhead totaled $720,000.Based on the 2020 results, and projected production for 2021, management prepared the 2021 budget and estimated that manufacturing overhead would total $800,000.The estimated number of direct labor hours for 2021 is 50,000, and the estimated amount of direct labor cost is $1,000,000.The company plans to use direct labor hours as the basis to allocate overhead to jobs.During May and June 2021, employees worked on the following four jobs:  What is the predetermined overhead rate that Stone Cliff will use to allocate overhead during 2021?

Stone Cliff Company Manufactures Custom-Order Furniture