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A company uses direct labor hours as its allocation base. Management estimates the company will have 10,000 hours of direct labor during the year and total overhead costs of $120,000. The predetermined overhead rate will be $_____________ per hour.

Respuesta :

lavanyaande

The predetermined overhead rate will be $12 per hour.

Explanation:

Given:

Working hours of direct labor= 10,000

Total overhead costs= $120,000

To Find:

The predetermined overhead rate.

Solution:

It can be calculated as follows,

Total overhead costs/Working hours of direct labor

       =120000/10000

       = 12

So the predetermined overhead rate will be $12 per hour.

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