Doric Agricultural Corporation uses a predetermined overhead allocation rate based on the direct labor cost.The manufacturing overhead cost allocated during the year is $300,000.The details of production and costs incurred during the year are as follows: $$\begin{array} { | l | r | }
\hline \text { Actual direct materials cost } & \$ 812,000 \
\hline \text { Actual direct labor cost } & \$ 170,000 \
\hline \text { Actual overhead costs incurred } & \$ 264,000 \
\hline \text { Total direct labor hours } & 5,580 \text { hours } \
\hline
\end{array}$$ What is the predetermined overhead allocation rate applied by the corporation? (Round your answer to two decimal places. )

Question

Doric Agricultural Corporation uses a predetermined overhead allocation rate based on the direct labor cost.The manufacturing overhead cost allocated during the year is $300,000.The details of production and costs incurred during the year are as follows: $$\begin{array} { | l | r | } 
\hline \text { Actual direct materials cost } & \$ 812,000 \
\hline \text { Actual direct labor cost } & \$ 170,000 \
\hline \text { Actual overhead costs incurred } & \$ 264,000 \
\hline \text { Total direct labor hours } & 5,580 \text { hours } \
\hline
\end{array}$$ What is the predetermined overhead allocation rate applied by the corporation? (Round your answer to two decimal places. )

Quizplus · Accepted Answer

The predetermined overhead allocation rate is calculated as (Allocated Overhead / Actual Direct Labor Cost) * 100 = ($300,000 / $170,000) * 100 = 176.47%.

Doric Agricultural Corporation Uses a Predetermined Overhead Allocation Rate Based