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24 August, 13:19

Moor Company: If overhead is applied to production basis of direct labor cost, what predetermined overhead rate was in effect during the year?

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  1. 24 August, 14:34
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    The predetermined overhead rate for machine hours is calculated by dividing the estimated manufacturing overhead cost total by the estimated number of machine hours

    Explanation:

    if the annual budget is based on a production quantity of 10,000 units and the direct labor required for each unit is three hours, the total direct labor is 10,000 x 3 or 30,000 hours. The total overhead expenditure is then divided by the total labor hours to arrive at the overhead rate.
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