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15 April, 08:00

Boaz Company had the following information: Estimated Overhead $ 300,000 Actual Overhead $ 350,000 Estimated labor hours 75,000 Actual labor hours 84,000 What is the predetermined overhead rate if labor hours are used as the allocation base? a. $3.57 per labor-hour

b. $4.00 per labor-hour

c. $4.67 per labor-hour

d. $4.17 per labor-hour

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  1. 15 April, 11:43
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    b. $4.00 per labor-hour

    Explanation:

    The computation of the predetermined overhead rate is shown below:

    Predetermined overhead rate = Estimated overhead : Estimated labor hours

    = $300,000 : 75,000 labor hours

    = $4.00 per hour

    By dividing the estimated overhead by the estimated labor hours we can find out the predetermined overhead rate and we did the same in the above calculation
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