Question

Manton Manufacturing applies manufacturing overhead costs to products at a budgeted indirectminuscost rate of $ 90 per direct manufacturing laborminushour. A retail outlet has requested a bid on a special order of the Toy Bear product. Estimates for this order​ include: Direct materials of $ 87 comma 000​; 700 direct manufacturing laborminushours at $ 40 per​ hour; and a 20​% markup rate on total manufacturing costs. Manufacturing overhead cost estimates for this​ special-order total​ ________.

Answer 1

Manufacturing overhead cost estimates for this​ special-order is $63,000

Step-by-step explanation:

The computation of the manufacturing overhead is shown below:

= Actual direct labor-hours × predetermined or estimated overhead rate

= 700 direct labor hours × $90

= $63,000

It shows a relationship between the estimated overhead rate and the actual direct labor hours

For better understanding, we provided the formula to compute the estimated manufacturing overhead rate.

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours)