Good Roast roasts, grinds and bags of organic coffee beans sold at specialty grocery stores. Good roast allocates manufacturing overhead based on direct labour hours. Good Roast has projected total overhead for the year to be $960,000. Of this amount, $640,000 relates to fixed overhead expenses. Good Roast expects to process 160,000 cases of organic coffee this year. The direct labour standard for each case is 30 minutes.
Required:
1. Compute the standard variable overhead rate.
2. Compute the fixed overhead rate.
3. Compute the standard total overhead rate.

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The Answer of Good Roast roasts, grinds and bags of organic coffee beans sold at specialty grocery stores. Good roast allocates manufacturing overhead based on direct labour hours. Good Roast has projected total overhead for the year to be $960,000. Of this amount, $640,000 relates to fixed overhead expenses. Good Roast expects to process 160,000 cases of organic coffee this year. The direct labour standard for each case is 30 minutes.
Required:
1. Compute the standard variable overhead rate.
2. Compute the fixed overhead rate.
3. Compute the standard total overhead rate.

Good Roast Roasts, Grinds and Bags of Organic Coffee Beans