Asked by
Verified
Longobardi Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labor-hours for the upcoming year at 35,700 labor-hours. The estimated variable manufacturing overhead was $5.93 per labor-hour and the estimated total fixed manufacturing overhead was $805,392. The actual labor-hours for the year turned out to be 33,200 labor-hours. The predetermined overhead rate for the recently completed year was closest to:
A) $28.49 per labor-hour
B) $22.56 per labor-hour
C) $5.93 per labor-hour
D) $30.64 per labor-hour
Predetermined Overhead Rate
A rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to individual units of production based on a certain activity base.
Variable Manufacturing Overhead
Costs that vary with production volume, such as indirect materials and utilities, related specifically to the manufacturing process.
Labor-Hours
The total number of working hours clocked by employees within a specific period, reflecting the labor input.
- Identify the predetermined overhead rate by referencing different benchmarks such as machine-hours, labor-hours, and direct labor expenses.
- Assess the consequences of actual overhead and labor hours deviating from projected estimates on the application of manufacturing overhead expenses.
Verified Answer
Learning Objectives
- Identify the predetermined overhead rate by referencing different benchmarks such as machine-hours, labor-hours, and direct labor expenses.
- Assess the consequences of actual overhead and labor hours deviating from projected estimates on the application of manufacturing overhead expenses.
Related questions
The Silver Corporation Uses a Predetermined Overhead Rate to Apply ...
Longobardi Corporation Bases Its Predetermined Overhead Rate on the Estimated ...
Bernson Corporation Is Using a Predetermined Overhead Rate That Was ...
Brothern Corporation Bases Its Predetermined Overhead Rate on the Estimated ...
The Management of Garn Corporation Would Like to Investigate the ...