Question

Dagger Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $210,900. At the end of the year, actual direct labor-hours for the year were 15,000 hours, manufacturing overhead for the year was underapplied by $11,400, and the actual manufacturing overhead was $204,900. The predetermined overhead rate for the year must have been closest to:

Answer 1

$12.90

Step-by-step explanation:

Relevant data provided as per the question below:-

Actual manufacturing overhead = $204,900

Underapplied = $11,400

Number of hours = 15,000

As per the given question the solution of predetermined overhead rate is provided below:-

`predetermined\ overhead\ rate = (Actual\ manufacturing\ overhead\ -\ Under\ applied)/(Number\ of\ hours)`

`= (\$204,900 -\$11,400)/(15,000)`

=
`(\$193,500)/(15,000)`

= $12.90

So, we have calculated the predetermined overhead rate by using the above formula.