Harris Fabrics computes its plantwide predetermined overhead rate annually based on direct labor-hours. At the beginning of the year, it estimated 27,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $520,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor- hour. Harris's actual manufacturing overhead cost for the year was $631,380 and its actual total direct labor was 27,500 hours. Required: Compute the company's plantwide predetermined overhead rate. Note: Round your answer to 2 decimal places. Predetermined overhead rate per DLH

Harris Fabrics computes its plantwide predetermined overhead rate annually based on direct labor-hours. At the beginning of the year, it estimated 27,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $520,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor- hour. Harris's actual manufacturing overhead cost for the year was $631,380 and its actual total direct labor was 27,500 hours. Required: Compute the company's plantwide predetermined overhead rate. Note: Round your answer to 2 decimal places. Predetermined overhead rate per DLH

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Description: Harris Fabrics computes its plantwide predetermined overhead rate annually based on direct labor-hours. At the beginning of the year,It estimated 27,000 direct labor-hours would be required for the period's estimated level of production. The company

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...

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A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following Independent allocation bases? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000
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Rockford Company has four departmental accounts: Building Maintenance, General Factory Overhead, Machining, and Assembly. The direct labor hour method is used to apply factory overhead to the jobs being worked on in Machining and Assembly. The company expects each production department to use 30,000 direct labor hours during the year. The estimated overhead rates for the year include the following: During the year, both Machining and Assembly used 28,000 direct labor hours. Factory overhead costs incurred during the year follow: In determining application rates at the beginning of the year, cost allocations were made as follows, using the sequential distribution method: Building Maintenance to: General Factory Overhead, 10%; Machining, 50%; Assembly, 40%. General factory overhead was distributed according to direct labor hours. Required: Determine the under- or overapplied overhead for each production department. (Hint: First you must distribute the service department costs.)
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