contestada

Odonnel Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $36,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 10,000 direct labor-hours.

The predetermined overhead rate is closest to______________.

a. $9.20 per direct labor-hour
b. $2.80 per direct labor-hour
c. $6.40 per direct labor-hour
d. $3.60 per direct labor-hour

Respuesta :

Answer:

option (c) $6.40 per direct labor-hour

Explanation:

Data provided in the question:

Total fixed manufacturing overhead cost = $36,000

Variable manufacturing overhead = $2.80 per direct labor-hour

Direct labor-hours = 10,000

Now,

Fixed manufacturing overhead rate

= [ Fixed manufacturing overhead ] ÷ [ Direct labor hour ]

= $36,000 ÷ 10,000

= $3.6

Predetermine overhead rate

= Fixed manufacturing overhead rate + Variable manufacturing overhead

= $3.6 + $2.80

= $6.40 per  direct labor-hour

Hence,

Answer is option (c) $6.40 per direct labor-hour