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Question: Calculating the inventoriable product cost.
Richards Manufacturing estimates the following activity for the coming year:
expected production 20 000 unitsexpected direct labour hours 20 000 hoursexpected manufacturing overhead $200 000.Manufacturing overhead is allocated on the basis of direct labour hours. At the end of the financial period, the following information was collected:
direct labour hours 18 000 hoursmanufacturing overhead $240 000.Direct labour costs were $60 per hour and there was no direct labour cost variance.
Calculate the predetermined manufacturing overhead rate at the beginning of the year.Calculate the actual manufacturing overhead rate for the year.Calculate an inventoriable product cost based on: budgeted costsactual costs.
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