Given an annual budgeted manufacturing overhead of $2,250,000 and a total of 2,800 labor hours as the allocation base, what is the predetermined overhead rate per labor hour?

Multiple choice question for Job Costing. Select an option, then review the explanation below.

Explanation

To find the predetermined overhead rate, divide the total budgeted manufacturing overhead ($2,250,000) by the total labor hours (2,800). This results in $803.571 per labor hour, which is the correct rate used to allocate overhead costs.

Practice related questions from the same subject.

1.Given that the planned direct labor hours amount to 3,550 and the labor cost rate is $500 per hour, what is the total direct labor expense?
2.What term describes the scenario where a cost object is associated with a specific job, customer, or product?
3.In normal costing, what is determined by multiplying the budgeted overhead rate by the actual quantity of the allocation base used?
4.Given an indirect cost pool budget of $139,600 and a total cost allocation base amounting to $155,600, what is the budgeted indirect cost rate?
5.Given a budgeted indirect cost rate of $225 and a budgeted allocation base of 750 hours, what is the total annual budgeted indirect cost?

Given an annual budgeted manufacturing overhead of $2,250,000 and a total of 2,800 labor hours as the allocation base, what is the predetermined overhead rate per labor hour?

Explanation

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