Calculate the company predetermined manufacturing

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Problem 1: Calculate the company's predetermined manufacturing overhead rate, assuming the company uses direct labor hours as its allocation base.

Type of Cost Estimated total cost for the year

Selling and Administrative salaries and expenses $ 210,000

Direct Labor (Estimated 40,000 DL hours @ average wage rate of $12 per hour) $ 480,000

Indirect plant labor $ 40,000

Plant utilities $ 50,000

Purchases of direct materials $ 1,400,000

Lease and property taxes on the plant $ 120,000

Marketing expenses $ 30,000

Depreciation on production equipment (equipment originally costing $700,000 three year ago is being depreciated over a 5 year useful life using straight-line depreciation. No salvage value is expected.) $ 140,000

Indirect materials to be used in the plant $ 20,000

Reference no: EM132655570

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