Question

Rocky Mountain Corporation makes two types of hiking boots—Xactive and Pathbreaker. Data concerning these two product lines appear below: Xactive Pathbreaker Direct materials per unit $ 64.10 $ 50.30 Direct labor cost per unit $ 17.50 $ 12.30 Direct labor-hours per unit 1.4 DLHs 1 DLHs Estimated annual production and sales 18,000 units 68,000 units The company has a conventional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:Compute the predetermined overhead rate based on direct labor-hours. (Round the intermediate calculations and final answer to two decimal places.)

Answer 1

$19.3 per direct labor hours

Step-by-step explanation:

The computation of the predetermined overhead rate is shown below:

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

where,

Assume figures

For the total estimated manufacturing overhead is $1,798,760

And, the estimated total direct labor-hours is 93,200

Now put these values to the above formula

So, the rate would equal to

= $1,798,760 ÷ 93,200 direct labor hours

= $19.3 per direct labor hours