Kiever, Inc., manufactures and sells two products: Product O9 and Product Y1.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: The company's total manufacturing overhead is $1,121,960.If the company allocates all of its overhead based on direct labor-hours, the predetermined overhead rate would be closest to:

Question

Kiever, Inc., manufactures and sells two products: Product O9 and Product Y1.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below:  The company's total manufacturing overhead is $1,121,960.If the company allocates all of its overhead based on direct labor-hours, the predetermined overhead rate would be closest to:

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $1,121,960 ÷ 9,300 DLHs = $120.64 per DLH (rounded)