Before the year began, Butler Manufacturing estimated that manufacturing overhead for the year would be $176,400 and that 13,800 direct labor hours would be worked. Actual results for the year included the following: The predetermined manufacturing overhead rate per direct labor hour is closest to

Question

Before the year began, Butler Manufacturing estimated that manufacturing overhead for the year would be $176,400 and that 13,800 direct labor hours would be worked. Actual results for the year included the following:  The predetermined manufacturing overhead rate per direct labor hour is closest to

Quizplus · Accepted Answer

The predetermined manufacturing overhead rate is calculated by dividing the estimated manufacturing overhead for the year by the estimated direct labor hours for the year:

Predetermined overhead rate = Estimated overhead / Estimated direct labor hours
Predetermined overhead rate = $176,400 / 13,800
Predetermined overhead rate = $12.78 per direct labor hour

Therefore, the closest choice is (C) $12.78.

Before the Year Began, Butler Manufacturing Estimated That Manufacturing Overhead