The predetermined manufacturing overhead rate for the year was 140% of direct labor cost; employees were paid $17.50 per hour. If the estimated direct labor hours were 15,000, what was the estimated manufacturing overhead? A. $210,000. B. $187,500. C. $262,500. D. $367,500.

Business · College · Wed Jan 13 2021

Answered on

To find the estimated manufacturing overhead using the predetermined manufacturing overhead rate, you can calculate it based on the direct labor cost.

Given:

Predetermined manufacturing overhead rate = 140% of direct labor cost

Direct labor cost = $17.50 per hour

Estimated direct labor hours = 15,000

First, calculate the direct labor cost:

Direct labor cost = Hourly rate * Estimated direct labor hours

Direct labor cost = $17.50/hour * 15,000 hours

Direct labor cost = $262,500

Now, apply the predetermined manufacturing overhead rate to the direct labor cost:

Manufacturing overhead = Predetermined overhead rate * Direct labor cost

Manufacturing overhead = 140% * $262,500

Manufacturing overhead = 1.4 * $262,500

Manufacturing overhead = $367,500


Therefore, the estimated manufacturing overhead is D. $367,500.

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