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How do I calculate the predetermined overhead rate per hour given the following info?
Johansen Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for the next year:
Direct materials $ 6,000 Direct labor 20,000 Rent on factory building 15,000 Sales salaries 25,000 Depreciation on factory equipment 8,000 Indirect labor 12,000 Production supervisor's salary 15,000 Johansen estimates that 20,000 direct labor hours will be worked during the year. The predetermined overhead rate per hour will be: |
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12,000/20,000 = 0.60
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