Question

Washtenaw Corporation uses a job-order costing system. The following data are for last year: Estimated Direct Labor Hours 14,000 Estimated Machine Hours 12,000 Estimated Manufacturing Overhead Cost $42,600 Actual Direct Labor Hours 11,000 Actual Machine Hours 13,000 Actual Manufacturing Overhead Cost $39,000 Washtenaw applies overhead using a predetermined rate based on direct labor-hours. What predetermined overhead rate was used last year

Answer 1

$3.25 per direct labor-hour

Step-by-step explanation:

Calculation for predetermined overhead rate was used last year

Predetermined overhead rate = $39,000 ÷ 12,000 direct labor-hours

Predetermined overhead rate= $3.25 per direct labor-hour

Therefore the predetermined overhead rate was used last year was $3.25 per direct labor-hour