Question

Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming year: Direct materials used $50,600 Direct labor costs $70,700 Wages of factory janitors $39,500 Sales supervisor salary $51,600 Utilities for factory $17,000 Rent on factory building $13,500 Advertising expense $5210 The company estimates that 2280 direct labor hours will be worked in the upcoming year, while 1900 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be

Answer 1

$30.70 per direct labor hours

Step-by-step explanation:

The computation of the predetermined manufacturing overhead rate per direct labor hour is shown below:

= Total estimated manufacturing overhead ÷ total estimated direct labor hours

where,

Total estimated manufacturing overhead = Wages of factory janitors + Utilities for factory + Rent on factory building

= $39,500 + $17,000 + $13,500

= $70,000

And, the estimated direct labor hour is 2,280

So, the predetermined overhead rate

total estimated machine hours = 1600

= $70,000 ÷ 2,280 machine hours

= $30.70 per direct labor hours