(SOLVED) Predetermined overhead rates for various cost drivers manufacturer The following


Question Description:

$20

Predetermined overhead rates for various cost drivers: manufacturer The following data relate to Denyer Ltd for the year just ended.
Budgeted sales revenue………………………………..$307,500
Actual manufacturing overhead……………………….$510,000
Budgeted machine hours…………………………………15,000
Budgeted direct labour hours……………………………30,000
Budgeted direct labour rate…………………………………..21
Budgeted manufacturing overhead……………………$546,000
Actual machine hours……………………………………16,500
Actual direct labour hours……………………………….27,000
Actual direct labour rate…………………………………$22.50
Required:
1. Calculate the firm’s predetermined and actual overhead rates for the year using each of the following cost drivers:
(a) Machine hours.
(b) Direct labour hours.
(c) Direct labour cost.
2. Would you recommend using an actual overhead rate or a predetermined overhead rate for D Ltd? Explain your answer.

Answer

$20