Escatel Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. Data for the most recently completed year appear below.
|
Estimates made at the beginning of the year : |
|
|
Estimated labor hours |
24,000 |
|
Estimated variable manufacturing overhead |
$6.86 per labor hour |
|
Estimated total fixed manufacturing overhead |
$394,560 |
|
Actual labor hours for the year |
24,500 |
Required:
Compute the company’s predetermined overhead rate for the recently completed year.