Question

Hill Mfg. provided the following information from its accounting records for 2008:

Expected production 30,000
labor hours Actual production 28,000
labor hours Budgeted overhead $900,000
Actual overhead $870,000
How much is the overhead application rate if Barr bases the rate on direct labor hours?a. $32.14 per hourb. $30.00 per hourc. $31.07 per hourd. $29.00 per hour

Answer 1

b. $30.00 per hour

Step-by-step explanation:

Overhead application rate = Budgeted Overhead / Budgeted Activity

= $900,000 / 30,000 labor hours

= $30 per direct labor hour

Conclusion :

The overhead application rate is $30.00 per hour.