Question

Required information Exercise 3-35 Predetermined Overhead Rate; Various Cost Drivers (LO 3-4) [The following information applies to the questions displayed below.] The following data pertain to the Oneida Restaurant Supply Company for the year just ended. Budgeted sales revenue $ 205,000 Actual manufacturing overhead 338,000 Budgeted machine hours (based on practical capacity) 8,000 Budgeted direct-labor hours (based on practical capacity) 20,000 Budgeted direct-labor rate $ 14 Budgeted manufacturing overhead $ 364,000 Actual machine hours 11,000 Actual direct-labor hours 18,000 Actual direct-labor rate $ 17 Exercise 3-35 Part 1 Required: Compute the firm’s predetermined overhead rate for the year using each of the following common cost drivers: (a) machine hours, (b) direct-labor hours, and (c) direct-labor dollars. (Round your answers to 2 decimal place.)

Answer 1

Instructions are listed below

Step-by-step explanation:

Giving the following information:

Budgeted manufacturing overhead $ 364,000.

Budgeted machine hours (based on practical capacity) 8,000

Budgeted direct labor hours (based on practical capacity) 20,000

Budgeted direct-labor rate $ 14

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

A) Estimated manufacturing overhead rate= 364,000 / 8,000= $45.5 per machine hour

B) Estimated manufacturing overhead rate= 364,000 / 20,000= $18.2 per direct labor hour

C) Estimated manufacturing overhead rate=364,000 / (8,000*14)= $3.25 per direct labor dollar