Question

O Required information [The following information applies to the questions displayed below.) Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Activity Cont Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory Estimated Overhead Cost $ 16,400 $ 5,000 $ 20,500 $ 19,000 $ 21,700 $ 36,000 $ 53,600 Expected Activity 10,000 direct labor-hours 10,000 machine-hours 500 setups 500 orders 700 toata 3,600 packages 10,000 direct labor-hours 2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH

Answer 1

Total Estimated overhead costs = [$16,400 + $5,000 + $20,500 + $19,000 + $21,700 + $36,000 + $53,600]

Total Estimated overhead costs = $172,200

Total Estimated Direct Labor hours = 10,000

Predetermined Overhead rate = Total Estimated overhead costs / Total Estimated Direct Labor hours

Predetermined Overhead rate = $172,200 / 10,000

Predetermined Overhead rate = $17.22 per Direct labor hour

So, The Predetermined Overhead rate = $17.22 per DLH