A manufacturing company applies factory overhead based on direct labor hours

Accounting Dec 03, 2020

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $339,000 and direct labor hours would be 43,500. Actual manufacturing overhead costs incurred were $318,500, and actual direct labor hours were 52,400. What is the predetermined overhead rate per direct labor hour? Oa. $9.35 Ob. $11.69 Oc. $7.79 Od. $6.23

Expert Solution

c. $7.79

Calculation :

Predetermined overhead rate per direct labour hour = Estimated factory overhead / Estimated labour hour

= 339000 / 43500

= 7.79

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