Question

Exercise 2-1 Compute a Predetermined Overhead Rate [LO2-1] 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 20,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $94,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. Harris's actual manufacturing overhead cost for the year was $123.900 and its actual total direct labor was 21,000 hours. Required Compute the company's plantwide predetermined overhead rate for the year. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH

Answer 1

2-1) Plantwide overhead rate = Estimated overhead/estimated labor hour = (94000/20000+2) = 6.70 per labor hour

2-2) Manufacturing overhead applied = 10800*23.40 = $252720

2-3) Total manufacturing cost

Direct material	231
Direct labor	153
Manufacturing overhead (153/17*14)	126
Total manufacturing cost	510

Unit product cost = 510/40 = 12.75 per unit

2-12) a) Plantwide overhead rate = (650000/100000+3)= 9.50 per machine hour

b) Total manufacturing cost = (450+210+40*9.50) = 1040

c) Unit product cost = 1040/52 = 20

d) Selling price per unit = 20*2.2 = 44