Boaz Company had the following information: Estimated Overhead $ 300,000 Actual Overhead $ 350,000 Estimated labor hours 75,000 Actual labor hours 84,000 What is the predetermined overhead rate if labor hours are used as the allocation base? a. $3.57 per labor-hour

b. $4.00 per labor-hour

c. $4.67 per labor-hour

d. $4.17 per labor-hour

b. $4.00 per labor-hour

Explanation:

The computation of the predetermined overhead rate is shown below:

Predetermined overhead rate = Estimated overhead : Estimated labor hours

= $300,000 : 75,000 labor hours

= $4.00 per hour

By dividing the estimated overhead by the estimated labor hours we can find out the predetermined overhead rate and we did the same in the above calculation