Question

XYZ Co. is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $121,000 and 10,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $113,000 and 10,900 total direct labor-hours during the period. The predetermined overhead rate is closest to: Group of answer choices

Answer 1

the predetermined overhead rate is $12.10

Step-by-step explanation:

The computation of the predetermined overhead rate is shown below:

The Predetermined overhead rate is

= (Estimated total fixed manufacturing overhead ÷ Estimated direct labor hours)

= ($121,000 ÷ 10,000)

= $12.10

hence, the predetermined overhead rate is $12.10