Question

Assume (1) estimated fixed manufacturing overhead for the coming period of $221,000, (2) estimated variable manufacturing overhead of $2.00 per direct labor hour, (3) actual manufacturing overhead for the period of $320,000, (4) actual direct labor-hours worked of 54,000 hours, and (5) estimated direct labor-hours to be worked in the coming period of 55,000 hours. The pre-determined plantwide overhead rate for the period is closest to:____.A) $5.82.

B) $5.70.
C) $5.93.
D) $5.64.

Answer 1

The predetermined plantwide overhead rate for the period is closest to:____.

$6.02

Step-by-step explanation:

a) Data and Calculations:

Estimated fixed manufacturing overhead = $221,000

Estimated variable manufacturing overhead = $2.00 per DLH

Actual manufacturing overhead for the period = $320,000

Actual direct labor-hours worked = 54,000 hours

Estimated direct labor-hours to be worked in the coming period = 55,000 hours.

Predetermined plantwide overhead rate:

Estimated fixed manufacturing overhead = $221,000

Estimated variable manufacturing overhead = 110,000 ($2.00 * 55,000)

Total estimated manufacturing overhead = $331,000

Predetermined rate = $331,000/55,000 = $6.02 per DLH