Ans.
Predetermined overhead rate = Total estimated overhead costs / Estimated direct labour hours
= $669,000 / 34,000
= $19.68 per DLH
*Working Notes:
1) Calculations of Variable manufacturing overhead cost :
Variable manufacturing cost = Variable cost per labor hour * Estimated direct labour hours
= $3 * 34,000
= $102,000
2) Calculations of Total manufacturing overhead cost:
Particulars . Amount
Variable manufacturing overhead cost. $102,000
Fixed manufacturing overhead cost . $567,000
Total estimated overhead cost. $669,000
*Actual direct labour hours are used to calculate the overhead cost applied.
*Actual manufacturing overhead cost is used to find out the value of over / under applied overhead.
Hamis Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At...
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 34,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $587,000 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 $723.282 and its actual total direct labor was 34,500 hours. Required:...
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 34,000 direct labor-hours would be
required for the period’s estimated level of production. The
company also estimated $505,000 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 $638,351 and its actual total direct labor
was 34,500 hours.
Exercise...
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