Barr Mfg.provided the following information from its accounting records for 2022: $\begin{array}{lr}
\text { Estimated production } & 60,000 \text { labor hours } \
\text { Actual production } & \$ 6,000 \text { labor hours } \
\text { Estimated overhead } & \$ 900,000 \
\text { Actual overhead } & \$ 870,000
\end{array}$ How much is the predetermined overhead rate if Barr bases the rate on direct labor hours?
A)$16.07 per hour
B)$15.00 per hour
C)$14.50 per hour
D)$15.54 per hour

Question

Quizplus · Accepted Answer

The predetermined overhead rate is calculated by dividing the estimated overhead by the estimated production in labor hours: $900,000 / 60,000 hours = $15.00 per hour.

Barr MfgProvided the Following Information from Its Accounting Records for 2022