Here are selected data for Wilson Company: Estimated manufacturing overhead $259,650 Factory utilities $30,200 Estimated labor hours 35,000 Indirect labor $22,400 Actual direct labor hours 36,000 Sales commissions $53,700 Estimated direct labor cost $329,600 Factory rent $47,700 Actual direct labor cost $320,600 Factory property taxes $28,100 Factory depreciation $65,400 Indirect materials $33,000 If the company allocates overhead based on direct labor cost, what is the predetermined manufacturing overhead rate?

Question

Business

Sheldon Barker

22 June, 06:43

Here are selected data for Wilson Company: Estimated manufacturing overhead $259,650 Factory utilities $30,200 Estimated labor hours 35,000 Indirect labor $22,400 Actual direct labor hours 36,000 Sales commissions $53,700 Estimated direct labor cost $329,600 Factory rent $47,700 Actual direct labor cost $320,600 Factory property taxes $28,100 Factory depreciation $65,400 Indirect materials $33,000 If the company allocates overhead based on direct labor cost, what is the predetermined manufacturing overhead rate?

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Answers (1)

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Abdullah Mora · Answer 1

Predetermined manufacturing overhead rate = 0.788

Explanation:

Giving the following information:

Estimated manufacturing overhead $259,650

Factory utilities $30,200

Estimated labor hours 35,000

Indirect labor $22,400

Actual direct labor hours 36,000

Sales commissions $53,700

Estimated direct labor cost $329,600

Factory rent $47,700

Actual direct labor cost $320,600

Factory property taxes $28,100

Factory depreciation $65,400

Indirect materials $33,000

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

Predetermined manufacturing overhead rate = 259650/329600

Predetermined manufacturing overhead rate = 0.788