Question

Exercise 4-12 Oriole Company manufactures a line of lightweight running shoes. CEO Mark Oriole estimated that the company would incur $3.745.580 in manufacturing overhead during the coming year. Additionally, he estimated the company would operate at a level requiring 219.000 direct labor hours and 553,853 machine hours. Assume that Oriole Company uses direct labor hours as its manufacturing overhead application base. Calculate the company's predetermined overhead rate (Round answer to 2 decimal places, e.. 52.75.) Company's predetermined overhead rate $ VDLH Assume that job 4375 required 480 direct labor hours to complete. How much manufacturing overhead should be applied to the job? (Round answer to decimal places, 6.0. 5,275.) Manufacturing overhead applied LINK TO TEXT Assume that Oriole Company uses machine hours as its manufacturing overhead application base. Calculate the company's predetermined overhead rate. (Round answer to 2 decimal places... 52.75.) Company's predetermined overhead rate

Answer 1

Part 1

Estimated manufacturing overhead = $3,245,580

Estimated direct labor hours = 219,000 hours

Predetermined overhead rate = Estimated manufacturing overhead/Estimated direct labor hours

= 3,245,580/219,000

= $14.82 per direct labor hour

Part 2

Manufacturing overhead applied = Actual direct labor hours x Predetermined overhead rate

= 480 x 14.82

= $7,114

Part 3

Estimated manufacturing overhead = $3,245,580

Estimated machine hours = 553,853

Predetermined overhead rate = Estimated manufacturing overhead/Estimated machine hours

= 3,245,580/553,853

= $5.86 per machine hour

part 4

Manufacturing overhead applied = Actual machine hours x Predetermined overhead rate

= 690 x 5.86

= $4,043

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