Nadal Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year: Actual direct labor hours 232 comma 800 Estimated direct labor hours 250 comma 000 Actual manufacturing overhead costs $ 365 comma 900 Estimated manufacturing overhead costs $ 400 comma 400 Actual direct labor cost $ 465 comma 700 Estimated direct labor cost $ 500 comma 600 If Nadal Company uses direct labor hours as the allocation base, what would the predetermined manufacturing overhead rate be? (Round your answer to the nearest cent.)

Predetermined manufacturing overhead rate= $1.6016 per direct labor hour

Explanation:

Giving the following information:

Estimated direct labor hours 250,000

Estimated manufacturing overhead costs $400,400

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 400,400 / 250,000

Predetermined manufacturing overhead rate= $1.6016 per direct labor hour

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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