Doric Agricultural Products uses a predetermined overhead allocation rate based on direct labor cost. The predetermined overhead allocated during the year is $270,000. The details of production and costs incurred during the year are as follows:
$$\begin{array} { | l | r | }
\hline \text { Actual direct materials cost } & \$ 812,500 \
\hline \text { Actual direct labor cost } & \$ 180,000 \
\hline \text { Actual overhead costs incurred: } & \$ 264,000 \
\hline \text { Total direct labor hours } & 5,520 \text { hours } \
\hline
\end{array}$$ What is the predetermined overhead allocation rate applied by Doric?

Question

Doric Agricultural Products uses a predetermined overhead allocation rate based on direct labor cost. The predetermined overhead allocated during the year is $270,000. The details of production and costs incurred during the year are as follows:
 $$\begin{array} { | l | r | } 
\hline \text { Actual direct materials cost } & \$ 812,500 \
\hline \text { Actual direct labor cost } & \$ 180,000 \
\hline \text { Actual overhead costs incurred: } & \$ 264,000 \
\hline \text { Total direct labor hours } & 5,520 \text { hours } \
\hline
\end{array}$$ What is the predetermined overhead allocation rate applied by Doric?

Quizplus · Accepted Answer

The Answer of Doric Agricultural Products uses a predetermined overhead allocation rate based on direct labor cost. The predetermined overhead allocated during the year is $270,000. The details of production and costs incurred during the year are as follows:
 $$\begin{array} { | l | r | } 
\hline \text { Actual direct materials cost } & \$ 812,500 \
\hline \text { Actual direct labor cost } & \$ 180,000 \
\hline \text { Actual overhead costs incurred: } & \$ 264,000 \
\hline \text { Total direct labor hours } & 5,520 \text { hours } \
\hline
\end{array}$$ What is the predetermined overhead allocation rate applied by Doric?

Doric Agricultural Products Uses a Predetermined Overhead Allocation Rate Based