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III. Manufacturing Overhead Costs estimated $       500,000 Direct Labor Hours estimated             50,000 Machine Hours estimated...

III. Manufacturing Overhead Costs estimated $       500,000
Direct Labor Hours estimated             50,000
Machine Hours estimated           250,000
Direct Labor Costs estimated $    1,000,000
Determine the Pre-determined Overhead rate based on the following:
a Direct Labor Hours
b Machine Hours
c Direct Labor Cost

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Expert Solution

Predetermined overhead rate =  Estimated manufacturing overhead cost/Estimated total units in the allocation base

a) Predetermined overhead rate based on Direct labour hours

Estimated Manufacturing overheads = 500,000$

Estimated Direct labour Hours = 50,000 hours

Predetermined overhead rate based on direct labour hours =  Estimated manufacturing overhead cost/Esimated Direct labour hours

= 500,000/50,000

=$10 per direct labour hours

B) Predetermined overhead rate based on Machine  hours

Estimated Manufacturing overheads = 500,000$

Estimated Machine Hours = 250,000 hours

Predetermined overhead rate based on Machine hours =  Estimated manufacturing overhead cost/Estimated Machine hours

= 500,000$/250,000

=$2 per machine hours

c)Predetermined overhead rate based on Direct labour cost

Predetermined overhead rate based on Direct labout cost =  Estimated manufacturing overhead cost/Estimated Direct labour cost

Estimated Manufacturing overheads = 500,000$

Estimated Direct labour coast= 100000 $

=500000/100000

=$5 per labour cost

ekkarill92 answered 2 years ago
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