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The following information was taken from the accounting records of the company Budgets Manufacturing Overhead $497,432...

The following information was taken from the accounting records of the company Budgets Manufacturing Overhead $497,432 Actual Manufacturing overhead $418,798 Budgeted Direct Labor Hours $16,197 Actual Direct Labor Hours $17,584 The company uses a predetermined overhead rate based on direct labor hours, what would be the rate?

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Answer #1

Answer: $30.71

Calculations:

Predetermined Overhead rate = Budgeted manufacturing overhead ÷ Budgeted direct labor hours

= $497,432 ÷ 16,197

= $30.71

Therefore, Predetermined Overhead rate is $30.71 per direct labor hour.

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