Lee Corporation uses direct labour-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $364,140. At the end of the year, actual direct labour-hours for the year were 24,000 hours, manufacturing overhead for the year was overapplied by $8,060, and the actual manufacturing overhead was $359,140. The predetermined overhead rate for the year must have been closest to:

Question

BlackTom AI · Accepted Answer

Predetermined overhead rate = estimated total manufacturing overhead ÷ estimated direct labour-hours.

Relevant concepts:
- Predetermined overhead rate is set at the start of the year using estimated overhead and estimated allocation base (direct labour-hours).
- Applied overhead during the year = predetermined rate × actual direct labour-hours.
- Overapplied overhead means applied overhead > actual overhead; amount overapplied = applied − actual.

Step-by-step reasoning and calculations:
1. Actual manufacturing overhead for the year = $359,140.
2. Overapplied overhead = $8,060, so applied overhead = actual overhead + overapplied amount:
   Applied overhead = $359,140 + $8,060 = $367,200.
3. Applied overhead also equals predetermined rate × actual direct labour-hours.
   Actual direct labour-hours = 24,000 hours.
4. Predetermined overhead rate = Applied overhead ÷ Actual direct labour-hours:
   Rate = $367,200 ÷ 24,000 hours = $15.30 per direct labour-hour.
5. (Optional check) Using the given estimated overhead $364,140, the implied estimated hours would be $364,140 ÷ $15.30 = 23,800 hours, consistent with a predetermined rate set before actual hours were known.

Why the correct answer is correct:
- The rate of $15.30 per hour yields applied overhead of $15.30 × 24,000 = $367,200, which is exactly $8,060 greater than the actual $359,140 (i.e., overapplied by $8,060), matching the problem statement.

Why the other choices are incorrect:
- $15.43 → applied = $15.43 × 24,000 = $370,320 (overapplied by $11,180, not $8,060).
- $14.96 → applied = $14.96 × 24,000 = $359,040 (underapplied by $100, not overapplied).
- $15.17 → applied = $15.17 × 24,000 = $364,080 (overapplied by $4,940, not $8,060).

Conclusion: The predetermined overhead rate must have been $15.30 per direct labour-hour, which matches the provided answer.

类似问题

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