In December 2016, Shire Computers management establishes the 2017 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $747,500 of overhead costs and $575,000 of direct labor cost in year 2017. During March 2017, Shire began and completed Job 13-56. 1. What is the predetermined overhead rate for 2017

redetermined overhead rate = 1.3

Explanation:

Giving the following information:

In December 2016, Shire Computers management establishes the 2017 predetermined overhead rate based on direct labor cost.

The information used in setting this rate includes estimates that the company will incur $747,500 of overhead costs and $575,000 of direct labor cost in the year 2017.

predetermined overhead rate = total estimated manufacturing overhead / total amount of allocation base

predetermined overhead rate=747500 / 575000 = 1.3