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Calculate the predetermined overhead allocation rate

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Reference no: EM132533947

Selection of an Overhead Allocation Base Wolf Manufacturing expects the following overhead costs in the current year:

Indirect material $ 45,000

Indirect labor 55,000

Depreciation of machinery 160,000

Repair and maintenance on machinery 135,000

Utilities and taxes 55,000

Total $450,000

  • It expects to use 25,000 direct labor hours at a cost of $525,000 and 15,000 machine hours during the year.

REQUIRED

Question 1: Justify the selection of an appropriate allocation base and calculate the predetermined overhead allocation rate.

Reference no: EM132533947

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