Tata Motors management is working with their production supervisor to compute a predetermined overhead rate...
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Tata Motors management is working with their production supervisor to compute a predetermined overhead rate for the coming year to be used in the manufacture of their upcoming car the Tata Safari. The production supervisor has put together a budget of 1,600 direct labor hours for the coming year. During the same period, they plan to use 2,000 machine hours. He has assembled the following information for the upcoming year: Direct materials $100,000 Direct labor cost $140,000 Wages of factory janitors $70,000 Sales supervisor salary $102,000 Utilities for factory $34,000 Rent on factory building $24,000 Advertising expense $10,000 If Tata Motors decides to use a predetermined overhead rate based on direct labor hours, what would be the predetermined overhead rate?
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