Tiger Furnishings produces two models of cabinets for home theater components, t

Question

Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow: Total Basic Dominator 1,200 4,500 3,300 450 2,000 1,100 Units produced 1,650 6,500 4,400 $9,800 3,600 13,400 107,300 157,564 $278,264 Direct labor-hours Direct materials costs Direct labor costs 74,100 33,200 Total costs Required Compute the predetermined overhead rate assuming that Tiger Fumishings uses direct labor costs to allocate overhead costs. (Round your answer to 2 decimal places.) overhead rate % of direct labor cost

Explanation / Answer

Predetermined overhead rate = Overhead cost/ direct material cost *100

Direct labour cost = $ 107,300

Manufacturing overheads = $ 157,564

Predetermined overhead rate = 157,564/107,300 *100 = 146.84%

Ans) 146.84%

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