Different companies use different bases in computing their predetermined overhead rates. From the following estimated data, compute the predetermined rate to be used by each company:
|
Company Paper |
Rock |
Scissors |
|
|
Machine-hours |
100,000 |
210,000 |
125,000 |
|
Direct labor-hours |
50,000 |
48,000 |
39,000 |
|
Direct labor cost |
$800,000 |
$735,000 |
$410,000 |
|
Manufacturing overhead cost |
$400,000 |
$432,000 |
$375,000 |
Basis for determining predetermined overhead rate:
|
Company |
Basis |
|
Paper |
Direct labor cost |
|
Rock |
Direct labor-hours |
|
Scissors |
Machine-hours |