A furniture manufacturer has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period:
-What is the predetermined overhead rate to the nearest cent?
A)$13.40
B)$13.61
C)$13.81
D)$13.20

Question

A furniture manufacturer has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: 
-What is the predetermined overhead rate to the nearest cent?
A)$13.40 
B)$13.61 
C)$13.81 
D)$13.20

Quizplus · Accepted Answer

Predetermined overhead rate = Budgeted total overhead F1F1F1S1F1F1F10 Denominator level of activity
= ($23,460 + $66,300)F1F1F1S1F1F1F10 6,800 hours = $89,760 F1F1F1S1F1F1F10 6,800 hours = $13.20 per hour

A Furniture Manufacturer Has a Standard Costing System Based on Standard