A furniture corporation manufactures two models of furniture-Standard and Deluxe.The total estimated manufacturing overhead costs are $64,200.The following estimates are available:

The company uses direct labor costs as the base to allocate manufacturing overhead.Calculate the predetermined overhead rate.(Round your answer to two decimal places. )

Question

A furniture corporation manufactures two models of furniture-Standard and Deluxe.The total estimated manufacturing overhead costs are $64,200.The following estimates are available:

The company uses direct labor costs as the base to allocate manufacturing overhead.Calculate the predetermined overhead rate.(Round your answer to two decimal places. )

Quizplus · Accepted Answer

D)Total direct labor cost = ($125 × 240 units)+ ($140 × 600 units)= $114,000
Predetermined overhead allocation rate = $64,200 / $114,000 = 56.32% of direct labor costs

A Furniture Corporation Manufactures Two Models of Furniture-Standard and Deluxe