Question

2. Sigma Corporation estimates its plantwide predetermined overhead rate annually on the basis of direct labor-hours....

2. Sigma Corporation estimates its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 34,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $559,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4.00 per direct labor-hour. Sigma’s actual manufacturing overhead cost for the year was $758,696 and its actual total direct labor was 34,500 hours.

Compute Sigma’s predetermined overhead rate.

Homework Answers

Answer #1

Solution:

Predermined overhead rate = $20.44per labour hr

Explanation:

Predetmined overhead rate is caculated on the estimates not on the actuals

Predetermined overhead rate = Estimated overhead / Allocation base

Predetermined overhead rate = Estimated total manufacturing overhead cost / Estimated total direct labour hours

Estimated fixed manufacturing overhead $559,000
Estimated variable manufacturing overhead ($4 x 34000) $136,000
Estimated total manufacturing overhead cost (559,000+136,000) $695,000
Estimated total direct labour hours 34,000
Predetermined overhead rate ($695,000 / 34000) $20.44 per labour hr
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At...
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 39,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $503,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Harris’s actual manufacturing overhead cost for the year was $691,149 and its actual total direct labor was 39,500 hours. Required:...
Your company computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At...
Your company computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 20,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $94,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. Your company's actual manufacturing overhead cost for the year was $123,900 and its actual total direct labor was 21,000 hours....
Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. At the...
Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 29,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $577,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Harris's actual manufacturing overhead for the year was $722,648 and its actual total direct labor was 29,500 hours. Required: Compute the...
Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the...
Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 65,000 direct labor-hours would be required for the period’s estimated level of client service. The company also estimated $487,500 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firm’s actual overhead cost for the year was $505,700 and its actual total direct labor was 70,900 hours. Required: 1. Compute...
Logan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the...
Logan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 29,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $508,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Logan's actual manufacturing overhead for the year was $656,884 and its actual total direct labor was 29,500 hours. Required: Compute the...
5. Assume (1) a company’s plantwide predetermined overhead rate is $13.00 per direct labor-hour, and (2)...
5. Assume (1) a company’s plantwide predetermined overhead rate is $13.00 per direct labor-hour, and (2) its job cost sheet for Job X shows that this job incurred direct materials and direct labor charges of $500 and $360, respectively. If Job X’s total job cost is $1,289, how many direct labor-hours were worked on this job? 6. Assume (1) actual machine-hours worked during the period of 54,000 hours, (2) estimated machine-hours to be worked during the period of 55,600 hours,...
Luthan Company uses a plantwide predetermined overhead rate of $22.70 per direct labor-hour. This predetermined rate...
Luthan Company uses a plantwide predetermined overhead rate of $22.70 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $272,400 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 $268,000 and 10,700 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.
Daguio corporation uses direct labor hours in its predetermined overhead rate. At the beginning of the...
Daguio corporation uses direct labor hours in its predetermined overhead rate. At the beginning of the year the total estimated manufacturing overhead was $224,580. At the end of the year actual direct labor hours for the year were 18,200 hours manufacturing overhead for the year was under applied by 12,100, and the actual manufacturing overhead was $219,580. The predetermined overhead rate for the year must have been closest to
Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year,...
Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 22,100 hours and the total estimated manufacturing overhead was $570,180. At the end of the year, actual direct labor-hours for the year were 22,050 hours and the actual manufacturing overhead for the year was $570,180. Overhead at the end of the year was:
Dagger Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year,...
Dagger Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $240,850. At the end of the year, actual direct labor-hours for the year were 15,300 hours, manufacturing overhead for the year was underapplied by $15,000, and the actual manufacturing overhead was $236,850. The predetermined overhead rate for the year must have been closest to: $14.50 $15.44 $13.63 $15.16
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT