Question

Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $85,120 and 2,800 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $86,870 and actual direct labor-hours were 2,700. The pre-determined overhead rate for the year was closest to:_____.a. $31.60.b. $33.62.c. $30.36.d. $32.30.

Answer 1

Overhead rate is $30.4

So option (c) is correct option

Step-by-step explanation:

We have given total estimated overhead = $85120

Estimated direct labor hours = 2800

Actual manufacturing overhead for the year = $86870

Actual labor hour = 2700

We have to find overhead rate for the year

Overhead rate is equal to the ratio of estimated overhead to estimated labor hour

Therefore overhead rate
`=(85120)/(2800)=30.4`$

So option (c) is correct