Question

Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 29,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $511,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Harris's actual manufacturing overhead cost for the year was $654,035 and its actual total direct labor was 29,500 hours. Required: Compute the company's plantwide predetermined overhead rate for the year. (Round your answer to 2 decimal places.) Predetermined overhead per DLH rate

Answer 1

Calculation of estimated total overhead expense Estimated overhead expense - Variable overhead expense & fined overhead exp. + $5,11,000 = (29,000 direct labour $3 each hours 7 598000 Calculation of predetermined overhead rate - Predetermined overhead rate - Estimated Estimated total overhead expense direct labour hours = $20.62 = $598000 29000 per direct labourhour.