Question

Superior Uniforms produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses. Superior Uniforms reports the following cost data for the past yea (Click the icon to view the cost data) Read the requirements. Requirement 1. Compute the predetermined manufacturing overhead rate. Enter the formula for predetermined manufacturing overhead rate, then compute the rate. Estimated yearly overhead costs / Estimated yearly machine hours = Predetermined overhead rate - per machine hour Data Table Budget 7,400 hours 7,100 hours $ 24,000 $ 51,000 Actual 6,500 hours 6,700 hours $ 24,000 $ 54,500 Direct labor hours .... .......... Machine hours .............. Depreciation on salespeople's autos. Indirect materials Depreciation on trucks used to deliver uniforms to customers Depreciation on plant and equipment Indirect manufacturing labor Customer service hotline ........... Plant utilities.......................... Direct labor cost................ .. $ 14,500 $ 68,000 $ 43,500 $ 19,000 $ 800 $ 72,000 $ 12,000 $ 69,500 $ 46,500 $ 20,000 $ 1,800 $ 86,000 Enter any number in the edit fields and then click Check Answer. parts + remaining

Answer 1

Solution:

Estimated Yearly overhead costs = Indirect Materials + Depreciation on Plant and Equipment + Indirect Manufacturing labor + Plant utilities

= 51000 + 68000+43500+800 = $163,300

Estimated Yearly overhead costs / Estimated years machine hours = Predetermined overhead rate

$163300 / 7100 = $23 per machine hour