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Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow:

Basic Dominator Total
Units produced 850 400 1,250
Machine-hours 3,700 1,100 4,800
Direct labor-hours 3,700 3,000 6,700
Direct materials costs $ 9,100 $ 3,600 $ 12,700
Direct labor costs 66,700 33,000 99,700
Manufacturing overhead costs 237,247
Total costs $ 349,647

Required:

Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor costs to allocate overhead costs. (Round your answer to 2 decimal places.)

NOTE: The answer should be % of direct labor cost, not a price.

Respuesta :

Answer:

237.96%

Explanation:

The computation of the predetermined overhead rate is shown below:

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor cost)

= ($237,247) ÷ ($99,700)

= 237.96%

By dividing the total estimated manufacturing overhead from the estimated direct labor cost we can get the percentage of direct labor cost or predetermined overhead rate