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The overhead costs that Lucca Industries, Inc., used to compute its overhead rate for the past year are as follows: Indirect materials $79,200 Maintenance 14,900
The overhead costs that Lucca Industries, Inc., used to compute its overhead rate for the past year are as follows: Indirect materials $79,200 Maintenance 14,900 Outside service contract 17,300 Indirect labor 79,100 Factory supervison 42,900 Depreciation 85,000 Factory Insurance 8,200 Property taxes 6,500 Heat, Light, power 7,700 Miscellaneous 5,760 Total Overhead $346,560 The allocation base for the past year was 45,600 total machine hours. For the next year, all overhead costs except depreciation, property taxes, and miscellaneous overhead are expected to increase by 10 percent. Depreciation should increase by 12 percent, and property taxes and miscellaneous overhead are expected to increase by 20 percent. Plant capacity in terms of machine hours used will increase by 4,400 hours. Compute the overhead rate for next year
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