Ask Question
3 March, 02:19

Elkland Heating & Cooling installs and services commercial heating and cooling systems. Elkland uses job costing to calculate the cost of its jobs. Overhead is allocated to each job based on the number of direct labor hours spent on that job. At the beginning of the current year, Elkland estimated that its overhead for the coming year would be $61,500. It also anticipated using 4,100 direct labor hours for the year. In November, Elkland started and completed the following two jobs: Job 101 Job 102Direct Material used $1,500 $10,500Direct labor hour used 155 82What is Elkland's predetermined overhead rate based on direct labor hours?

+1
Answers (1)
  1. 3 March, 04:51
    0
    Estimated manufacturing overhead rate = $15 per direct labor hour

    Explanation:

    Giving the following information:

    Overhead is allocated to each job based on the number of direct labor hours spent on that job.

    The estimated overhead = $61,500.

    Estimated direct labor hours = 4,100

    To calculate the estimated manufacturing overhead rate we need to use the following formula:

    Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

    Estimated manufacturing overhead rate = 61,500/4,100 = $15 per direct tlabor hour
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Elkland Heating & Cooling installs and services commercial heating and cooling systems. Elkland uses job costing to calculate the cost of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers