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Tillman Enterprises applies overhead on the basis of standard direct labor hours and has the following flexible budget cost formula for overhead: Overhead = $200,000
Tillman Enterprises applies overhead on the basis of standard direct labor hours and has the following flexible budget cost formula for overhead:
Overhead = $200,000 + $9.00 per direct labor hour
The overhead rate is developed assuming that 50,000 standard direct labor hours will be worked. The standard direct labor hours for the actual production during the period were 48,000 hours and actual overhead is $630,000.
What is the combined (fixed and variable) predetermined overhead application rate per standard direct labor hour?
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