More info: Predetermined overhead rate = $40,000 / 20,000 sunglasses

Predetermined overhead rate = $ 2

Sally's Sunglasses, a corporation, started a small manufacturing plant that fabricates polarized sunglasses. The manufacturing process starts by placing hot melted plastic in molds for the frames. After the molds are cooled, the frames are then prepared for the placement of the lenses. The lens material is a polarized plastic and each sheet of polarized plastic makes one lens. Once the polarized plastic for the lenses is fabricated for the sunglasses the lenses are then secured into the frame, the sunglasses are then inspected, next they are transferred to finished goods. This process is completely automated. Direct material, plastic-frames is added 100% at the beginning of the process. Lenses are added 100% at the end of the process. Conversion costs are added equally throughout the process. Conversion costs are 35% complete for ending inventory in work in process and the lenses are 0% complete as to ending inventory At the beginning of the accounting period, Sally's Sunglasses estimated that production would be 20,000 sunglasses. Our predetermined factory overhead rate is based on an estimated FOH of $40,000 and the production of 20,000 sunglasses. This information is to be used to determine the application rate for factory overhead. . Estimated and actual direct labor costs totaled $28,050. Actual factory overhead costs totaled $36,000. The following information is available concerning direct materials. Direct Materials-Plastic Beginning Inventory Purchase of Plastic Ending Inventory 0 pounds $7.00 per pound 10,000 pounds@ $7.00 per pound 0 pounds @ $7.00 per pound Each pair of sunglasses contains a half pound of plastic for the frames. The company starts 20,000 sunglasses for the period