Question

Longobardi Corporation bases its predetermined overhead rate on the estimated tabor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labor-hours for the upcoming year at 33,500 lobor-hours. The estimated variable manufacturing overhead was $6.37 per labor hour and the estimated total fixed manufacturing overhead was $850,900. The actual labor. hours for the year turned out to be 30,100 labor-hours. The predetermined overhead rate for the recently completed year was closest to: Multiple Choice $6.37 per labor-hour O $31.77 per labor-hour $35.36 per labor-hour

Answer 1

Predetermined Overhead rate = Estimated manufacturing overhead / Estimated total labor hours

Predetermined Overhead rate

=($850900+($6.37*33500))/33500= $31.77

Estimated variable manufacturing overhead was    $6.37 per labor-hour

Estimated total fixed manufacturing overhead was $850,900

Estimated the labor-hours 33,500

Predetermined Overhead rate is Rs $ 31.77 per labour hour