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K Company estimates that overhead costs for the next year will be $3,700,000 for indirect labor and $890,000 for factory util
K Company estimates that overhead costs for the next year will be $2,948,000 for indirect labor and $880,000 for factory util
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Answer #1

Estimated overhead cost = Indirect labor + Factory utilities

= 3,700,000+890,000

= $4,590,000

Predetermined overhead rate = Estimated overhead cost / Estimated direct labor hour

= 4,590,000/125,000

= $36.72 per direct labor hour

Estimated overhead cost = Indirect labor + Factory utilities

= 2,948,000+880,000

= $3,828,000

Estimated direct labor hour = 88,000

Predetermined overhead rate = Estimated overhead cost / Estimated direct labor hour

= 3,828,000/88,000

= $43.5 per direct labor hour

Overhead assigned to product = Direct labor hours used x Predetermined overhead rate

= 4 x 43.5

= $174

Kindly comment if you need further assistance. Thanks‼!

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