Question

Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming​ year:Direct materials used $ 50 comma 100 Direct labor costs $ 70 comma 700 Wages of factory janitors $ 39 comma 900 Sales supervisor salary $ 51 comma 500 Utilities for factory $ 17 comma 000 Rent on factory building $ 13 comma 900 Advertising expense $ 5 comma 480 The company estimates that 2 comma 200 direct labor hours will be worked in the upcoming​ year, while 1 comma 700 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be​ (Round your answer to the nearest​ cent.)A.$ 58.08.

Answer 1

The predetermined manufacturing overhead rate per direct labor hour will be $32

Step-by-step explanation:

The formula to compute the predetermined manufacturing overhead rate is shown below:

= (Estimated manufacturing overhead) ÷ (Estimated direct labor hours)

where,

Estimated manufacturing overhead = Wages of factory janitors + Utilities for factory + Rent on factory building

= $39,900 + $17,000 + $13,900

= $70,800

And, the estimated direct labor hours is 2,200 machine hours

Now put these values to the above formula

So, the value would equal to

= $70,800 ÷ 2,200 machine hours

= $32.18