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The management of Sharrar Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity rather than on the estimated amount of activity for the year. The company's controller has proveded an example to illustrate how this new system would...
Manufacturing overhead costs incurred: Indirect materials $1,100
Applying overhead The following information is provided: Estimated manufacturing overhead $690,000 Estimated machine hours 46,000 Actual machine hours worked 50,000 Actual costs incurred: Indirect materials $170,000 Indirect labor 230,000
Engine parts $875,000, Shop direct labor $640,000, shop and equipment depreciation 170,800, shop supplies 39,200, administrative office depreciation 102,800.. average direct labor rate is $16, total costs and expenses $1827,800, determine predetermined shop overhead rate per direct labor hour
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