Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 41,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $568,000 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 $763,752 and its actual total direct labor was 41,500 hours. Compute the company’s predetermined overhead rate for the year.
Fixed ovehead/estimated labour hour=($568000/41000)=$13.854(Approx)
Add:variable overhead rate =$3
With us, you are either satisfied 100% or you get your money back-No monkey business