Waldman Pools manufactures swimming pool equipment. Waldman estimates total manufacturing overhead costs next year to be 1,200,000. Waldman also estimates it will use 37,500 direct labor hours and incur750,000 of direct labor cost next year. In addition, the machines are expected to be run for 25,000 hours. Compute the predetermined manufacturing overhead rate for next year under the following independent situations:
1. Assume that the company uses direct labor hours as its manufacturing overhead allocation base.
2. Assume that the company uses direct labor cost as its manufacturing overhead allocation base.
3. Assume that the company uses machine hours as its manufacturing overhead allocation base.
Compute the predetermined manufacturing overhead rate for next year assuming that the company uses direct labor cost as its manufacturing overhead allocation base. Identify the formula and compute the predetermined manufacturing overhead rate for next year using direct labor cost as the manufacturing overhead allocation base.
Compute the predetermined manufacturing overhead rate for next year assuming that the company uses machine hours as its manufacturing overhead allocation base. Choose from any list or enter any number in the input fields and then continue to the next question.