Question

MC Qu. 120 Dallas Company uses a job order... Dallas Company uses a job order costing system. The company's executives estimated that direct labor would be $4,160,000 (260,000 hours at $16/hour) and that factory overhead would be $1,560,000 for the current period. At the end of the period, the records show that there had been 240,000 hours of direct labor and $1,260,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead rate

Answer 1

See below

Step-by-step explanation:

Per the given details, predetermined overhead is be calculated as seen below

Predetermined overhead = (Estimated factory overhead / Estimated direct labor hour) × 100

Estimated factory overhead = $1,560,000

Estimated direct labor hour = 260,000

Predetermined overhead = )$1,560,000 / 260,000) × 100

Predetermined overhead rate = 600%