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:

	Basic			Dominator			Total
Units produced		950			300			1,250
Machine-hours		3,100			3,000			6,100
Direct labor-hours		2,900			2,800			5,700
Direct materials costs	$	11,400		$	3,800		$	15,200
Direct labor costs		73,100			39,200			112,300
Manufacturing overhead costs								199,956
Total costs							$	327,456

Required:

Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor costs to allocate overhead costs. (Round your answer to 2 decimal places.)

Answer 1

Predetermined Overhead rate = Total estimated manufacturing overhead/Total direct labor cost

= 199,956/112,300

= 178.06%

I have rounded the number. Comment if you face any issues

Answer 2

199,956/112,300= 1.7805520926

rounded to 178.06