4-12 Predetermined overhead rates and manufacturing overhead application

(LO 4) Rector Company manufactures a line of lightweight running shoes. CEO Mark Rector estimated that the company would incur $2,500,000 in manufacturing overhead during the coming year. Additionally, he estimated the company would operate at a level requiring 250,000 direct labor hours and 400,000 machine hours.

(a) Assume that Rector Company uses direct labor hours as its manufacturing overhead application base. Calculate the companys predetermined overheard rate.

(b) Assume that job 4375 required 300 direct labor hours to complete. How much manufacturing overhead should be applied to the job?

(c) Assume that Rector Company uses machine hours as its manufacturing overhead application base. Calculate the companys predetermined overhead rate.

(d) Assume that job 4375 required 140 machine hours to complete. How much manufacturing overhead should be applied to the job?