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Braam Corporation Uses Direct Labor-Hours in Its Predetermined Overhead Rate

question 79

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Braam Corporation uses direct labor-hours in its predetermined overhead rate.At the beginning of the year,the estimated direct labor-hours were 11,500 hours.At the end of the year,actual direct labor-hours for the year were 9,700 hours,the actual manufacturing overhead for the year was $143,350,and manufacturing overhead for the year was underapplied by $18,220.The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:


Definitions:

Standard Direct Materials

The predetermined cost and quantity of raw materials required for the production of a unit of product under normal conditions.

Actual Materials Price

The price actually paid for raw materials used in the production process, which can be compared to the standard or budgeted cost to assess efficiency.

Standard Price

A pre-determined cost that a company expects to pay for materials, labor, and overhead expenses.

Standard Price

A pre-determined cost assigned to a product or service, often used in budgeting and performance evaluations.

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