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Dean Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of direct labour-hours. The following
Dean Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of direct labour-hours. The following data are available:
At capacityDirect labour-hours60,000Variable factory overheadR150,000Fixed factory overheadR240,000
The company is preparing a flexible budget for next year. Assume that Dean's denominator activity for the year is set at 80% of capacity. What would be the total predetermined overhead rate, based on direct labour-hours, for the year?
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