Predetermined overhead rate for the company


Question: Darrow Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the company worked 9,900 direct labor-hours and incurred $89,400 of actual manufacturing overhead cost. If overhead was underapplied by $2,100, the predetermined overhead rate for the company for the year must have been:

  • $8.32
  • $8.82
  • $9.1
  • $9.87

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Accounting Basics: Predetermined overhead rate for the company
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