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4 November, 22:14

Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming year:Direct materials used $ 50 comma 100 Direct labor costs $ 70 comma 700 Wages of factory janitors $ 39 comma 900 Sales supervisor salary $ 51 comma 500 Utilities for factory $ 17 comma 000 Rent on factory building $ 13 comma 900 Advertising expense $ 5 comma 480 The company estimates that 2 comma 200 direct labor hours will be worked in the upcoming year, while 1 comma 700 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be (Round your answer to the nearest cent.) A.$ 58.08.

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  1. 4 November, 23:12
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    The predetermined manufacturing overhead rate per direct labor hour will be $32

    Explanation:

    The formula to compute the predetermined manufacturing overhead rate is shown below:

    = (Estimated manufacturing overhead) : (Estimated direct labor hours)

    where,

    Estimated manufacturing overhead = Wages of factory janitors + Utilities for factory + Rent on factory building

    = $39,900 + $17,000 + $13,900

    = $70,800

    And, the estimated direct labor hours is 2,200 machine hours

    Now put these values to the above formula

    So, the value would equal to

    = $70,800 : 2,200 machine hours

    = $32.18
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