Question

Roget Factory has budgeted factory overhead for the year at $4,992,000. It plans to produce 2,000,000 units of product. Budgeted direct labor hours are 480,000, and budgeted machine hours are 750,000. Using a single plantwide factory overhead rate based on direct labor hours, the factory overhead rate for the year is

Answer 1

Estimated manufacturing overhead rate= $10.4 per direct labor hour.

Step-by-step explanation:

Giving the following information:

Roget Factory has budgeted factory overhead for the year at $4,992,000.

Budgeted direct labor hours are 480,000.

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

Estimated manufacturing overhead rate= 4,992,000/480,000

Estimated manufacturing overhead rate= $10.4 per direct labor hour.