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Reamer Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year:

Direct Materials......... $1,000

Direct labor........... 3,000

Sales Commissions......... 4,000

Salary of Production

Supervisor....................2,000

Indirect Materials.............400

Advertising Expense..........800

Rent of Factory Equipment 1,000

Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be:

$6.80
$6.00
$3.00
$3.40

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9899574

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