The fixed component of the predetermined overhead rate is closest to:

A) $16.73 per labor-hour
B) $6.19 per labor-hour
C) $8.36 per labor-hour
D) $12.38 per labor-hour

Question

The fixed component of the predetermined overhead rate is closest to:A) $16.73 per labor-hourB) $6.19 per labor-hourC) $8.36 per labor-hourD) $12.38 per labor-hour

Nisarg Thakor · Accepted Answer

Final Answer : B, Explanation :  Fixed component of the predetermined overhead rate = $185,700/30,000 labor-hours= $6.19 per labor-hourReference: APP10A-Ref7(Appendix 9A)A manufacturer of playground equipment has a standard costing system based on standard direct labor-hours (DLHs)as the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below:   The following data pertain to operations for the most recent period:

The fixed component of the predetermined overhead rate is closest to:

A) $16.73 per labor-hour
B) $6.19 per labor-hour
C) $8.36 per labor-hour
D) $12.38 per labor-hour

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