Henkes Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 66,000 labor-hours. The estimated variable manufacturing overhead was $8.41 per labor-hour and the estimated total fixed manufacturing overhead was $1,533,180. The actual labor-hours for the year turned out to be 68,400 labor-hours. Required:Compute the company's predetermined overhead rate for the recently completed year.

What will be an ideal response?


Estimated total manufacturing overhead = $1,533,180 + ($8.41 per labor-hour × 66,000 labor-hours) = $2,088,240

Predetermined overhead rate = $2,088,240 ÷ 66,000 labor-hours = $31.64 per labor-hour

Business

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