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2 December, 00:18

The Work in Process Inventory account of a manufacturing company has a $7,728 debit balance. The company applies overhead using direct labor cost. The cost sheet of the only job still in process shows direct material cost of $2,800 and direct labor cost of $1,600. Therefore, the company's predetermined overhead rate is:

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Answers (2)
  1. 2 December, 00:38
    0
    208%

    Explanation:

    Work In Progress = Direct materials + Direct labor + Over Head

    $7,728 = $2,800 + $1,600 + OH

    $7,728=$4,400

    $7,728-$4,400

    OH=$3,328

    OH rate = $3,328/$1,600

    = 208%
  2. 2 December, 02:57
    0
    The company's predetermined overhead rate is 208%

    Explanation:

    In order to calculate the company's predetermined overhead rate we would have to calculate first the Overhead applied as follows:

    o verhead applied=Work in process balance-Direct Material-Direct Labor

    o verhead applied=$7,728-$2,800-$1,600

    o verhead applied=$3,328

    Therefore, Overhead application rate = $3,328/$1,600 = 217%

    Overhead application rate = 208%

    The company's predetermined overhead rate is 208%
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