Top of Form Calculate and Use Overhead Rate During the coming accounting year, Baker Manufacturing, Inc.,...

Top of Form

Calculate and Use Overhead Rate

During the coming accounting year, Baker Manufacturing, Inc., anticipates the following costs, expenses, and operating data:

Direct material (16,000 lb.)	$ 80,000
Direct labor (@ $10/hr.)	140,000
Indirect material	12,000
Indirect labor	22,000
Sales commissions	34,000
Factory administration	16,000
Non factory administrative expenses	20,000
Other manufacturing overhead*	48,000
*Provides for operating 35,000 machine hours.

a. Calculate the predetermined manufacturing overhead rate for the coming year for each of the following application bases: (1) direct labor hours, (2) direct labor costs, and (3) machine hours.Round direct labor hours and machine hours answers to two decimal places, when applicable. Round direct labor costs to the nearest one decimal place percentage, when applicable (example: 76.4%).

Application base	Manufacturing overhead rate
Direct labor hours	$Answer
Direct labor costs	%Answer
Machine hours	Answer

b. For each item in requirement a, determine the proper application of manufacturing overhead to Job 63, to which 16 direct labor hours, $150 of direct labor cost, and 40 machine hours have been charged. Round answers to two decimal places, when applicable.

Application base	Overhead applied to Job 63
Direct labor hours	Answer
Direct labor costs	Answer
Machine hours

Expert Solution

a. Calculate the predetermined manufacturing overhead rate for the coming year for each of the following application bases: (1) direct labor hours, (2) direct labor costs, and (3) machine hours.Round direct labor hours and machine hours answers to two decimal places, when applicable. Round direct labor costs to the nearest one decimal place percentage, when applicable (example: 76.4%).

Application base	Manufacturing overhead rate
Direct labor hours	98000/14000 = 7 per hour
Direct labor costs	98000/140000 = 70%
Machine hours	98000/35000 = 2.8 per machine hour

b. For each item in requirement a, determine the proper application of manufacturing overhead to Job 63, to which 16 direct labor hours, $150 of direct labor cost, and 40 machine hours have been charged. Round answers to two decimal places, when applicable.

Application base	Overhead applied to Job 63
Direct labor hours	16*7 = 112
Direct labor costs	150*.70 = 105
Machine hours	40*2.8 = 112

ekkarill92 answered 2 years ago

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