Final answer:
The predetermined manufacturing overhead rate per direct labor hour is calculated by dividing the estimated total manufacturing overhead costs by the estimated total direct labor hours.
Step-by-step explanation:
The predetermined manufacturing overhead rate per direct labor hour is calculated by dividing the estimated total manufacturing overhead costs by the estimated total direct labor hours.
For example, if the estimated total manufacturing overhead costs are $50,000 and the estimated total direct labor hours are 10,000, the predetermined manufacturing overhead rate per direct labor hour would be $5 ($50,000 / 10,000).
This rate is used to allocate manufacturing overhead costs to individual products based on the amount of direct labor hours each product consumes. It provides a consistent and predictable way to assign overhead costs and helps in determining the per-unit cost of production.