predetermined overhead rates tiger furnishings produces two models of cabinets for h 691019
Predetermined Overhead Rates
Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow:
|
|
Basic |
Dominator |
Total |
|
Units produced |
1,000 |
250 |
1,250 |
|
Machine hours |
4,000 |
2,000 |
6,000 |
|
Direct labor hours |
3,000 |
2,000 |
5,000 |
|
Direct materials costs |
$10,000 |
$ 3,750 |
$ 13,750 |
|
Direct labor costs |
64,500 |
35,500 |
100,000 |
|
Manufacturing overhead costs |
|
|
174,100 |
|
Total costs |
|
|
$287,850 |
Required
Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor costs to allocate overhead costs.