Log in

View Full Version : Predetermined manufacturing overhead rate


ekettne
Sep 2, 2009, 11:07 PM
How do I calculate the predetermined manufacturing overhead rate when all the information I have is the following:

Machine hours
Indirect materials
Depreciation on trucks used to deliver uniforms to customers
Depreciation on plant and equipment
Indirect manufacturing labor
Customer service hotline
Plant utilities

morgaine300
Sep 3, 2009, 01:12 AM
Predetermined overhead rate is:
Estimated annual overhead costs/estimated annual activity base

Since the "only" info you seem to have includes machine hours, I'll assume they want the activity base to be machine hours. So your job then is to determine what of those costs are overhead, add them up and then use the equation.