Question
Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year, it estimated that 20,000
Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year, it estimated that 20,000 direct labor hours would be required for the years estimated level of production. The company also estimated $94,000 of fixed manufacturing overhead cost for the year and variable manufacturing overhead of $2 per direct labor hour. Harriss actual manufacturing overhead cost for the year was $123,900 and its actual total direct labor was 21,000 hours.
What is the companys predetermined overhead rate for the year?
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