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18 September, 19:54

The following information has been gathered for the GHI Manufacturing Company for its fiscal year ending December 31: Actual manufacturing overhead costs $ 212,500 Actual direct labor hours 54,900 Actual direct labor costs $ 445,000 Estimated manufacturing overhead costs $ 210,000 Estimated direct labor $ 434,000 Estimated direct labor hours 56,000 What is the predetermined manufacturing overhead rate per direct labor hour?

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  1. 18 September, 20:54
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    The predetermined manufacturing overhead rate per direct labor hour is $3.75 per direct labor hour

    Explanation:

    Actual manufacturing overhead costs = $ 212,500

    Actual direct labor hours = 54,900 hours

    Actual direct labor costs = $ 445,000

    Estimated manufacturing overhead costs = $210,000

    Estimated direct labor hours = 56,000 hours

    Predetermined Overhead Rate = Estimated manufacturing overhead costs : Estimated direct labor hours

    Predetermined Overhead Rate = $210,000 : 56,000

    Predetermined Overhead Rate = $3.75 per direct labor hour
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