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Question - Dinklemyer Corporation uses direct labor hours as its single cost driver. Actual overhead costs and actual direct labor hours for the first five months of the current year are as follows.
Month
Actual Total Overhead
Actual Direct Labor Hours
January
$975,000
19,250
February
950,000
18,400
March
860,000
17,000
April
700,000
12,375
May
760,000
13,200
Required -
a. Compute the company's estimated variable manufacturing overhead cost per direct labor hour.
b. Estimate the company's total monthly fixed manufacturing overhead cost.
c. Estimate the company's total manufacturing overhead for June through August if 40,000 total direct labor hours are budgeted for that specific three-month period.
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