[Baughm13]

Hey, I can't figure out how to calculate overhead rates when overhead is not giving. Here is my Question:
X Company has the following estimated costs for the year:

Direct materials $58,400
Factory supplies $20,200
Direct labor $23,800
Indirect labor $28,200
Selling and Administration $42,000
Factory rent $42,000
Factory insurance $61,000

X Company estimates that 1,400 direct labor hours will be worked during the year, and machines will be operated for 64,000 hours during the year. If overhead is applied on the basis of direct labor cost, what will the overhead rate be (rounded to the nearest cent)?


I used the equation Total Cost= Direct Materials+direct labor+OH to solve for OH. To do this I added up all the numbers and subtracted DL and DM. Then I divided the OH by the cost driver which I thought was 1400, because that is the direct labor hours.

If someone could please help me out with an equation or show me how to find OHR when OH is not given, I would really appreciate it.
Thanks,
Eric

[toluodetola]

A manufacturing company uses a job order cost accounting system. Overhead is applied using pounds of direct materials used as an allocation base. Total costs for a particular job were $5,720. Of this amount $2,600 was direct labor and $1,040 was direct material. The company pays $26 per hour of direct labor and $2 per pound of direct materials. What is this company's overhead rate?

[Michael Zerr]

X company has sales of 8M and profits before taxes $625K. X company has a loan outstanding at local bank for working capital. As the loan officer review the loan application, you are charged with making a recommendation as to whether the $608K should be renewed for another year. Footnote: Underabsorbed overhead of $462K was prorated to inventories (2/3) and COGS (1/3). The footnote is causing me problems where to use this information.