Question

TB MC Qu. 2-37 Longobardi Corporation bases its predetermined overhead Longobardi Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labor-hours for the upcoming year at 33,500 labor-hours. The estimated variable manufacturing overhead was $6.37 per labor- hour and the estimated total fixed manufacturing overhead was $850,900. The actual labor-hours for the year turned out to be 30,100 labor-hours. The predetermined overhead rate for the recently completed year was closest to: Multiple Choice $31.77 per labor-hour $25.40 per labor-hour $6.37 per labor-hour $35.36 per labor-hour

Answer 1

$ Predetermined Fixed manufacturing overheads (A) Number of predetermined Labour hours (B) Fixed manufacturing overheads per hour (A/B) add: Variable overhead per hour $ $ $ 8,50,900 33,500 hours 25.40 per labour hour 6.37 per labour hour 31.77 per labour hour Thus, first option '$ 31.77 per labour hour' should be the correct answer

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