Question

Henkes 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 company estimated the labor-hours for the upcoming year at 75,000 labor hours. The estimated variable manufacturing overhead was $10.70 per labor-hour and the estimated total fixed manufacturing overhead was $1.237.500. The actual labor-hours for the year turned out to be 78,100 labor hours. Required: Compute the company's predetermined overhead rate for the recently completed year. (Round your answer to 2 decimal places.) Predetermined overhead rate per labor-hour

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Answer 1 Predetermined Overhead rate = Estimated Manufacturing Overheads / Estimated Labor Hours (75,000 * 10.7) +1,237,500 / 75,000 = (802,500 +1,237,500) / 75,000 II $27.20 per labor hour Answer 2 Predetermined Overhead rate = Estimated Manufacturing Overheads / Estimated Labor Hours = (73,000 * 3.6) +94,900 / 73,000 II (262,800 + 94,900) / 73,000 $4.90 per labor hour $ 1,421 Amount of Overhead applied to Job X387 (4.9* 290)