Question

Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory Estimated Overhead Cost $ 22,000 $ 12,500 $ 25,600 $ 14,100 $ 38,000 $ 61,200 $ 57,600 Expected Activity 4,000 direct labor-hours 10,000 machine-hours 800 setups 300 orders 1,000 tests 3,400 packages 4,000 direct labor-hours Exercise 4-2 Part 2 2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH

Answer 1

Answer
Requirement 2 = $ 57.75 per direct labor hour
	Labor-related	$22,000
	Machine-related	$12,500
	Machine setups	$25,600
	Production orders	$14,100
	Product testing	$38,000
	Packaging	$61,200
	General factory	$57,600
A	TOTAL Overhead	$231,000
B	Total Direct Labor hours	4000
C = A/B	Predetermined Overhead rate	$57.75	Answer