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Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows.
Actual manufacturing overhead = $150,000
Estimated manufacturing overhead = $145,000
Direct labor hours incurred = 4,800
Direct labor hours estimated = 5,000
Compute the predetermined overhead rate.

Sagot :

Answer:

the predetermined overhead rate is $29 per direct labor hour

Explanation:

The computation of the predetermined overhead rate is shown below:

Predetermined overhead rate = Estimated manufacturing overhead ÷ estimated direct labor hours

= $145,000 ÷ 5,000 direct labor hours

= $29 per direct labor hour

Hence, the predetermined overhead rate is $29 per direct labor hour

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