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1. Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours....

1.

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 30,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $519,000 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 $669,475 and its actual total direct labor was 30,500 hours.

Compute the company’s plantwide predetermined overhead rate for the year. (Round your answer to 2 decimal places.)

2.

Luthan Company uses a plantwide predetermined overhead rate of $22.30 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $267,600 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 $270,000 and 12,100 total direct labor-hours during the period.

Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.

3.

Mickley Company’s plantwide predetermined overhead rate is $22.00 per direct labor-hour and its direct labor wage rate is $13.00 per hour. The following information pertains to Job A-500:

Direct materials $ 220
Direct labor $ 195

1. What is the total manufacturing cost assigned to Job A-500?

2. If Job A-500 consists of 80 units, what is the unit product cost for this job? (Round your answer to 2 decimal places.)

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Answer #1

1) Predetermined overhead rate= Estimated total manufacturing overhead/Estimated direct labor hours

= ($519000+$3.00*30000)/30000

= $20.30 per direct labor hour

2) Manufacturing overhead applied= Actual direct labor hours*Predetermined overhead rate

= 12100*$22.30= $269830

3) Total direct labor hours= $195/13= 15 direct labor hours

Direct materials $220
Direct labor 195
Manufacturing overhead applied (15*$22) 330
Total manufacturing cost $745

2) Unit product cost= Total manufacturing cost/Total number of units

= $745/80= $9.31 per unit

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