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 $50,800 Direct labor costs $70,000 Wages of factory janitors $39,500 Sales supervisor salary $51,600 Utilities for factory $16,100 Rent on factory building $13,200 Advertising expense $5130 The company estimates that 1420 direct labor hours will be worked in the upcoming year, while 1400 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.)

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Business

Joy Gross

16 August, 23:48

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 $50,800 Direct labor costs $70,000 Wages of factory janitors $39,500 Sales supervisor salary $51,600 Utilities for factory $16,100 Rent on factory building $13,200 Advertising expense $5130 The company estimates that 1420 direct labor hours will be worked in the upcoming year, while 1400 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.)

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Drake Haney · Answer 1

Estimated manufacturing overhead rate = $48.45 per direct labor hour

Explanation:

Giving the following information:

Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours.

Manufacturing overhead:

Wages of factory janitors $39,500

Utilities for factory $16,100

Rent on factory building $13,200

Total = $68,800

The company estimates that 1420 direct labor hours will be worked in the upcoming year.

Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base = 68800/1420 = $48.45 per direct labor hour