Question

Aspen Technologies has the following budget data:
Estimated direct labor hours 8,200 Estimated direct labor dollars $64,200 Estimated factory overhead costs $170,100
If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is:_______.
a. $24.89
b. $20.74
c. $31.12
d. $16.60

Answer 1

Answer:

Overhead rate = $20.74

Explanation:

Below is the given values:

Given the direct labor hours = 8200

Direct labor dollars = $64200

Factory overhead costs  =$170100

Use below formula to find the overhead rate.

overhead rate = Overhead cost / Direct labor hours

Now plug the values in formula:

Overhead rate = 170100 / 8200

Overhead rate = $20.74