Question

g widgets inc plans to produce 8000 widgets during the upcoming year. each widget requires four direct labor hours at 25 per hour and 110 in direct material costs .... compute the predetermined overhead rate per direct labor hour

Answer 1

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

Step-by-step explanation:

Giving the following information:

Production= 8,000 units

Direct labor hours= 4*8,000= 32,000 hours

To calculate the predetermined overhead rate, we need the estimated overhead costs. We don't have the number, but I will provide a fake number, and determine the overhead rate.

Estimated overhead costs= $1,500,000

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

Predetermined manufacturing overhead rate= 1,500,000 / 32,000

Predetermined manufacturing overhead rate= $46.875 per direct labor hour