Selected Information from the Budget of the Singh Corp Calculate the Predetermined Overhead Rate If the Company Uses the the Beginning

question 177

Essay

Selected information from the budget of the Singh Corp. at the beginning of the year follows:
$$\begin{array} { | l | r | } \hline \text { Estimated factory overhead } & \$ 132,000 \\\hline \text { Estimated direct labor hours } & 55,000 \text { hours } \\\hline \text { Estimated machine hours ......... } & 41,250 \text { hours } \\\hline \text { Estimated direct labor cost } & \$ 825,000 \\\hline \text { Actual factory overhead } & \\ \text { incurred during the year } &\$ 144,000 \\\hline\end{array}$$
Calculate the predetermined overhead rate if the company uses the following as a basis:
(a) Direct labor hours.
(b) Direct labor cost.
(c) Machine hours.

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Definitions:

Moving Average System

A method used in accounting and finance to smooth out data by generating a series of averages of different subsets of the full data set.

Freight-In Costs

Expenses associated with transporting goods from the supplier to the purchaser, typically included in the cost of inventory.

Freight-Out Costs

Expenses related to the transportation of goods from the seller to the buyer, typically recorded as a selling expense.

Interest Cost

The expense associated with borrowing funds, often calculated as the product of the interest rate and the outstanding principal of the debt.