6. Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 40,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $507,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. Harris’s actual manufacturing overhead cost for the year was $663,188 and its actual total direct labor was 40,500 hours.
Required:
Compute the company’s plant wide predetermined overhead rate for the year.
7. Luthan Company uses a plantwide predetermined overhead rate of $22.80 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $273,600 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours.
The company incurred actual total manufacturing overhead cost of $270,000 and 11,100 total direct labor-hours during the period.
Required:
Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.
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