Question

The following information is provided by the Donatella Corporation for the year: The actual overhead rate for applying manufacturing overhead is Actual direct labor hours worked 46,000 Budgeted overhead $300,000 Budgeted direct labor hours 30,000 Actual overhead costs incurred $460,000

I think I need a per unit or per hour cost?

Answer 1

Budgeted Manufactruing overheads $ 300,000

Budgeted Labour hours: 30,000

Pre-determined Overhead rate: Budgeted overheads / Budgeted Labour hour

                                               = $ 300,000 /30,000 hours = $ 10 per hour

The Manufacturing overheads is applied at the rate of $ 10 per hour.