Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. johansen corporation uses a predetermined overhead

Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to...

Free

90.2K

Verified Solution

Question

Accounting

Johansen Corporation uses a predetermined overhead rate based ondirect labor-hours to apply manufacturing overhead to jobs. TheCorporation has provided the following estimated costs for the nextyear: Direct materials $ 6,000 Direct labor $ 20,000 Rent onfactory building $ 15,000 Sales salaries $ 25,000 Depreciation onfactory equipment $ 8,000 Indirect labor $ 12,000 Productionsupervisor's salary $ 15,000 Jameson estimates that 20,000 directlabor-hours will be worked during the year. The predeterminedoverhead rate per hour will be: Multiple Choice $2.50 per directlabor-hour $2.79 per direct labor-hour $3.00 per direct labor-hour$4.00 per direct labor-hour

Answer & Explanation Solved by verified expert
4.4 Ratings (572 Votes)

Correct Answer ----Predetermined overhead rate -$2.50

Explanation and calculations

Schedule of Predetermined Overhead rate

Manufacturing Overheads

Rent of Factory Building

$    15,000.00

Depreciation on Factory Equipment

$      8,000.00

Indirect Labor

$    12,000.00

Production Supervisor's Salary

$    15,000.00

(A) Total Estimated Overheads

$    50,000.00

(B) Total Direct labor hours in the year

$    20,000.00

(A/B) Predetermined Overhead Rate per labor hour

$               2.50

Sales salary is a selling expense and not a product cost hence it will not be included for calculating predetermined overhead rate.

Direct material and labor are direct expenses, they are product cost but not a part of Overhead cost.    
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Accounting
1.2K views

Problem 4 - DividendCalculations & Journal Entries for EquityPart A Directions: ShorelineCompany has...Problem 4...

Chemistry
1.2K views

Calculate the wave number corresponding to the most and least energetic spectral lines in the Lyman,...

Physics
1.2K views

A pulley is hinged at the centre and a massless thread is wrapped around it...

Statistics
1.2K views

This question 1 point s possible Listed below are the ages of 11 players randomly...

Accounting
1.2K views

. LO #4 - Question 2 - Stock Options On January...

Accounting
1.2K views

Ivanhoe Company issued $ 540,000. 10-year, 7% bonds at 102. (a) Prepare a tabular summary...

Accounting
1.2K views

Campbell, a single taxpayer, earns $206,000 in taxable income and $12,000 in interest from an...

Accounting
1.2K views

11. Globe-Democrat newspapers sold 360 of annual subscriptions for cash at $100 each on May...

Accounting
1.2K views

Langley Corporation has 45,000 shares of $10 par value common stock outstanding. It declares a...

Accounting
1.2K views

Describe the perpetual and the periodic inventory systems. How are they different

Accounting
1.2K views

Jessie Jones has just been named the general manager of the Balmour Hotel. The hotel...

Accounting
1.2K views

T equila Sunrise Inn Balance Sheet As of December 31, 2009 and 2010 Condensed Income...