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Luthan Company uses a plantwide predetermined overhead rate of $22.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated

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Luthan Company uses a plantwide predetermined overhead rate of $22.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $268,800 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead cost of $269,000 and 11,800 total direct labor- hours during the period.

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