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USC Company has the following information available: Budgeted factory overhead costs $90,000 Actual factory overhead costs $80,000 Budgeted direct labor hours 20,000 Actual direct labor hours 21,000 Assume direct labor hours are the cost driver of factory overhead costs
USC Company has the following information available:
Budgeted factory overhead costs $90,000
Actual factory overhead costs $80,000
Budgeted direct labor hours 20,000
Actual direct labor hours 21,000
Assume direct labor hours are the cost driver of factory overhead costs. The budgeted factory overhead rate is ________.
Group of answer choices
$3.57 per direct labor hour
$3.81 per direct labor hour
$4.00 per direct labor hour
$4.50 per direct labor hour
Expert Solution
Formula;
Budgeted FOH rate = Budgeted factory overhead cost / budgeted direct labor hours
Put the values in the formula;
= 90,000 / 20,000
= 4.50
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