Question - Kramer Company has decided to use a predetermined rate to assign factory overhead to production. The following predictions have been made for 2010:
Total factory overhead costs $150,000
Direct labor hours 40,000 hours
Direct labor costs $200,000
Machine hours 60,000 hours
Compute the predetermined factory overhead rate under the three different bases: (1) direct labor hours, (2) direct labor costs, and (3) machine hours.