Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity base for her predetermined factory overhead rate, rather than machine hours (MH). Estimated Selected Amounts for the Year Estimated depreciation on equipment $1,200.00 Estimated total Office Manager/Knitting Supervisor wages $36,000.00 Estimated office utilities $3,000.00 Estimated factory utilities $4,800.00 Estimated factory rent $24,000.00 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500
Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity base for her predetermined factory overhead rate, rather than machine hours (MH). Estimated Selected Amounts for the Year Estimated depreciation on equipment $1,200.00 Estimated total Office Manager/Knitting Supervisor wages $36,000.00 Estimated office utilities $3,000.00 Estimated factory utilities $4,800.00 Estimated factory rent $24,000.00 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity base for her predetermined factory overhead rate, rather than machine hours (MH).
|
Estimated Selected Amounts for the Year
|
|
| Estimated |
$1,200.00 |
| Estimated total Office Manager/Knitting Supervisor wages | $36,000.00 |
| Estimated office utilities | $3,000.00 |
| Estimated factory utilities | $4,800.00 |
| Estimated factory rent | $24,000.00 |
|
Activity Base Data
|
|
| Estimated number of DLH for the year | 5,000 |
| Estimated number of MH for the year | 3,500 |
Compute the predetermined factory overhead rate for the current year. If required, round your answers to the nearest cent.
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