Question

Marquis Company estimates that annual manufacturing overhead costs will be $809,000. Estimated annual operating activity bases are direct labor cost $494,000, direct labor hours 52,400, and machine hours 108,200.

Compute the predetermined overhead rate for each activity base.

Overhead rate per direct labor cost (Round answers to 2 decimal places, e.g. 110.10%.)
Marquis Company estimates that annual manufacturin
Overhead rate per direct labor hour (Round answers to 2 decimal places, e.g. $10.50.)
$Marquis Company estimates that annual manufacturin
Overhead rate per machine hour (Round answers to 2 decimal places, e.g. $10.50.)

Answer 1

Instructions are listed below.

Step-by-step explanation:

Giving the following information:

Marquis Company estimates that annual manufacturing overhead costs will be $809,000. Estimated annual operating activity bases are direct labor cost $494,000, direct labor hours 52,400, and machine hours 108,200.

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Direct labor:

Estimated manufacturing overhead rate= 809,000/494,000= $1.64 per direct labor dollar

Direct labor hours:

Estimated manufacturing overhead rate= 809,000/52,400= $15.44 per direct labor hour

Machine hours:

Estimated manufacturing overhead rate= 809,000/108,200= $7.48 per machine hour