Find the best answers to your questions with the help of IDNLearn.com's expert contributors. Our community is here to provide detailed and trustworthy answers to any questions you may have.

The manufacturing overhead budget at Levetron Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,700 direct labor-hours will be required in August. The variable overhead rate is $9.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $143,990 per month, which includes depreciation of $25,640. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for August should be:

Sagot :

Answer:

$27.9

Explanation:

Labor hours × Variable manufacturing over head rate

= 7,700 × $9.2

= $70,840

We will then add fixed manufacturing overhead to the above

= $143,990 + $70,840

= $214,830

The next step is to divided the above by the direct labor hour

= $214,830 / 7,700

= $27.9

Therefore the predetermined overhead rate for August is $27.9