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EB1.
LO 6.1Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using:

Direct labor hours
Direct labor dollars
Machine hours

Respuesta :

Answer:

$3 per Direct labor hour

0.25

$25 per machine hour

Explanation:

Predetermined overhead rate

Using Direct labor hours:

= Overhead ÷ Direct labor hours

= $375,000 ÷ 125,000

= $3 per Direct labor hour

Using Direct labor dollars:

= Overhead ÷ Direct labor cost

= $375,000 ÷ $1,500,000

= 0.25

Using Machine hours:

= Overhead ÷ Machine hours

= $375,000 ÷ 15,000

= $25 per machine hour

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