Question

Daget Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $364,980. At the end of the year, actual direct labor-hours for the year were 24,000 hours, manufacturing overhead for the year was overapplied by $8,900, and the actual manufacturing overhead was $361,660. The predetermined overhead rate for the year must have been closest to:

Multiple Choice

$15.21 per direct labor-hour

$15.44 per direct labor-hour

$15.57 per direct labor-hour

$15.07 per direct labor-hour

Answer 1

$15.44 per direct labor-hour

Step-by-step explanation:

Actual manufacturing overhead = $361,660

Over applied overhead = $8,900

Applied manufacturing overhead

= Actual manufacturing overhead + Over applied overhead

= 361,660 + 8,900

= $370,560

Applied manufacturing overhead

= Actual direct labor hours*Predetermined overhead rate

370,560 = 24,000*Predetermined overhead rate

Predetermined overhead rate = 370,560/24,000

= $15.44 per direct labor hour