Determining predetermined overhead rate


Singleton Company is trying to find out a predetermined manufacturing overhead. Estimated overhead for the upcoming year is $600,000. Budgeted machine hours are 120,000 hours, and budgeted labor hours are 15,000 hours at a rate of $20.00 per hour. Calculate the predetermined overhead rate based on:

a) Machine hours

b) Direct labor hours

c) Direct labor dollars

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Accounting Basics: Determining predetermined overhead rate
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