Question

A company estimated the manufacturing overhead costs for the coming year at $420,000. The total estimated direct labor hours are 15,000 hours, and the estimated machine hours to be worked are 6,000 hours. The company allocates its manufacturing overhead costs based on the direct labor hours. What is the pre-determined overhead allocation rate?

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Answer 1

Answer:

70

Explanation:

total overhead =420000

overhead per machine hour =420000÷6000

ie. 70

now allot this on basis of direct labour hour

ie 15000×70