Problem
What is the predetermined manufacturing overhead rate?
The cost of the direct materials that can be used to manufacture the table are as follows. These cost are on a per unit basis.
Table Top $ 1,700.00
Table Leg $ 500.00
Drawer $ 370.00
Assume a $35 per hour wage rate to the assembly employees.
The company uses a job order costing system and applies manufacturing overhead to jobs based on direct labor hours.
The company estimates that there will be 12 direct labor hours worked during the month.
The estimated manufacturing overhead cost for the month is:
a. Factory supervisor salary per month $ 3,500.00
b. Rent for the factory per month $ 1,300.00
c. Depreciation of factory equipment per month $ 600.00
Total Estimated manufacturing overhead $ 5,400.00