The company records the following actual costs for the year: Indirect labor.....
ID: 2424520 • Letter: T
Question
The company records the following actual costs for the year:
Indirect labor.........................................$40,000 Rent on Plant..........................................$16,000
Plant supplies.........................................20,000 Plant utilities.............................................10,000
Machinery repair......................................14,000 Sales commissions....................................30,000
Advertising.............................................6,000 Direct labor.................................................64,000
Jay had budgeted $60,000 of direct labor cost and $90,000 of manufacturing overhead costs of the year.
Question: Compute the predetermined manufacturing overhead rate
Explanation / Answer
Solution:
Pretermined overhead rate = 150 % of direct labor cost.
Budgeted manufacturing overhead cost 90,000 Direct Labor cost 60,000 Predetermined overhead rate = Budgeted manufactuiring cost / Direct labpr cost * 100 150%