Question

Dagnon Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $299,130. At the end of the year, actual direct labor-hours for the year were 17,400 hours, manufacturing overhead for the year was overapplied by $13,850, and the actual manufacturing overhead was $294,130. The predetermined overhead rate for the year must have been closest to:

Answer 1

Answer:

The predetermined overhead rate will be equal to $17.70

Explanation:

We have given manufacturing overhead for the year was over applied by $13,850, and the actual manufacturing overhead was $294,130

So applied manufacturing overheads=$13850+$294130=$307980

Applied manufacturing overheads=predetermined overhead rate×Actual direct labor hours

Hence predetermined overhead rate $=\frac{307980}{17400}= 17.70$

So the predetermined overhead rate will be equal to $17.70