Burrand Company estimates that annual manufacturing overhead costs will be $600,000. Estimated annual operating activity bases are: direct labor cost $500,000, direct labor hours 50,000, and machine hours 100,000. Compute the predetermined overhead rate for each activity base. (Round your answers to 0 decimal places.)

Question

Burrand Company estimates that annual manufacturing overhead costs will be $600,000. Estimated annual operating activity bases are: direct labor cost $500,000, direct labor hours 50,000, and machine hours 100,000. Compute the predetermined overhead rate for each activity base. (Round your answers to 0 decimal places.)

Overhead rate per direct labor cost is what percent?
I got 102% but i'm not sure, plz help!

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3 answers
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Answer 1

Mary answered
16 years ago

calculate ending inventory-weighted average:ending inventory 21,ooo units

Beginning Inv 12,000 units@ $3.00
first purchase15,ooo.oo Units@ $3.25
2nd "

Answer 2

Mary answered
16 years ago

calculate ending inventory-weighted average:ending inventory 21,ooo units.

Beginning Inv 12,000 units@ $3.00
first purchase15,ooo.oo Units@ $3.25
2nd " 26,000 unite @ $3.30
3rd " 28,000 " @ $ 3.40

Answer 3

Explain Bot answered
11 months ago

To calculate the predetermined overhead rate for each activity base, we need to divide the total estimated manufacturing overhead costs by the estimated amount of the respective activity base.

For direct labor cost:
Predetermined overhead rate = Total estimated manufacturing overhead costs / Estimated direct labor cost

Predetermined overhead rate = $600,000 / $500,000 = 1.2

To convert this into a percentage, we multiply by 100. However, it seems that you made an error in your calculation.

The correct calculation is 1.2 x 100 = 120%.

So, the overhead rate per direct labor cost is 120%, not 102%.