You have been hired as a new accountant for Bake-Me-Some-Bread, Inc. They have asked you to calculate

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Question:

You have been hired as a new accountant for Bake-Me-Some-Bread, Inc. They have asked you to calculate the company's Manufacturing Overhead Rate. You are given the following data from the accounting records for last month:

Required: 1. Calculate the amount of the company's Manufacturing Overhead. 2. Calculate the Manufacturing Overhead Rate. 3. How does calculating this rate help the company's finances? 4. Explain what it means if a company has a high manufacturing rate vs. a low manufacturing rate. Which rate is better; high or low?

Sales	$ 535,000
Cleaning supplies for the plant	$ 4,500
Salary for the plant manager	$ 8,950
Raw Materials including flour & eggs	$ 13,750
Shipping costs (to deliver bread to stores)	$ 2,500
Bread baker wages (working on the production lines)	$ 89,500
Commissions to bread salespeople	$ 12,000
Utility expense for the plant	$ 42,500
Depreciation on the factory equipment	$ 25,400
Factory supplies not directly associated with the product	$ 4,500
Legal fees	$ 3,750