The McGreen Company employees worked 12,200 hours last year with an average hourly rate of
$13 per hour. The overhead was $793,000. If overhead is based on direct labor costs, then the overhead rate per direct labor dollar is

Question

Quizplus · Accepted Answer

The total direct labor cost is calculated by multiplying the total hours worked by the average hourly rate, which is 12,200 hours * $13/hour = $158,600. The overhead rate per direct labor dollar is found by dividing the total overhead by the total direct labor cost, which is $793,000 / $158,600 = $5.00.

The McGreen Company Employees Worked 12,200 Hours Last Year with an Average