Question

Calculate the Predetermined Overhead Rate (round to two decimal places

POR= Estimated Direct Labor Cost/Estimated Manufacturing Overhead
The company estimated the manufacturing overhead would be $169,950 and the Estimated Direct Labor Cost would be $84,975

Answer 1

The Predetermined Overhead Rate (POR) is calculated by dividing the estimated manufacturing overhead by the estimated direct labor cost, which results in a POR of 2.00 when rounding to two decimal places.

Step-by-step explanation:

To calculate the Predetermined Overhead Rate (POR), we use the formula given in the question: POR = Estimated Manufacturing Overhead / Estimated Direct Labor Cost. The company's estimated manufacturing overhead is $169,950 and the estimated direct labor cost is $84,975. By dividing the overhead by the labor cost, we get POR = $169,950 / $84,975.

Performing the calculation:

POR = $169,950 / $84,975

POR = 2.0002

Rounded to two decimal places, the Predetermined Overhead Rate (POR) is 2.00.