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6 September, 01:20

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

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  1. 6 September, 03:09
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    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
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