Calculate the predetermined overhead rate for the year, Ask an Expert

Accounting

Budgeted $ Sales $205,000
Budgeted Machine Hours 10,000
Budgeted Direct Labour Hours 20,000
Budgeted Direct Labour Rate (ph) $14
Budgeted Manufacturing Overhead $364,000
Actual Machine Hours 11,000
Actual Direct Labour Hours 18,000
Actual Direct Labour Rate (ph) $15
Actual Manufacturing Overhead $340,000

Required:

i. Calculate the predetermined overhead rate for the year using each of the following cost drivers:

a) Machine Hours
b) Direct Labour Hours
c) Direct Labour Cost

ii. Calculate whether overhead has been under or overapplied (and by how much) using each of the three cost drivers.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9432018

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