Question
Sirmons Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the
Sirmons Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 85,000 labor-hours. The estimated variable manufacturing overhead was $10.77 per labor-hour and the estimated total fixed manufacturing overhead was $1,465,700. The actual labor-hours for the year turned out to be 74,000 labor-hours. The predetermined overhead rate for the recently completed year was closest to:
$10.77 per labor-hour
$28.01 per labor-hour
$27.74 per labor-hour
$17.24 per labor-hour
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