Question

Baka 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 $239,700 and 4,700 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $242,000 and actual direct labor-hours were 4,600. The predetermined overhead rate for the year was closest to: Multiple Choice $52.61 $49.91 $51.00

Answer 1

$51.00

Step-by-step explanation:

Calaulation of Baka Corporation predetermined overhead rate for the year.

Formula for predetermined overhead rate:

Predetermined overhead rate=Estimated overhead÷Estimated direct labor hours

Where,

Estimated overhead= 239,700

Estimated direct labor hours= 4,700

Let plug in the formula

(239,700/4700)

=$51 per direct labor hour

Therefore the predetermined overhead rate for the year was closest to $51 per direct labor hour.