Question
Bramble Company produces high-quality microscopes for education and health care uses. The company uses a job order costing system. Because the microscopes' optics require significant
Bramble Company produces high-quality microscopes for education and health care uses. The company uses a job order costing system. Because the microscopes' optics require significant manual labor to ensure adherence to strict manufacturing specifications, the company applies overhead on the basis of direct labor hours. At the beginning of 2017, the company estimated its manufacturing overhead would be $1,960,000 and that employees would work a total of 49,000 direct labor hours. During March, the company worked on the following five jobs:
Jobs 134 and 158 were started in January, Jobs 212 and 287 were started in February, and Job 301 was started in March. During March, workers completed Jobs 134, 158, and 212. Jobs 134 and 212 were delivered to customers during March.
Actual overhead for the month of March was $176,000. The manufacturing overhead account is disposed of annually, not monthly.
Calculate the predetermined overhead rate used by Bramble Company in 2017.
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