Cacioppo Corporation Bases Its Predetermined Overhead Rate on the Estimated

question 11

Essay

Cacioppo Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 66,000 labor-hours. The estimated variable manufacturing overhead was $7.45 per labor-hour and the estimated total fixed manufacturing overhead was $1,760,220. The actual labor-hours for the year turned out to be 63,800 labor-hours.
Required:
Compute the company's predetermined overhead rate for the recently completed year.

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Definitions:

Direct Materials Budget

An estimation of the type and amount of materials required to meet production goals, along with the projected cost.

Quantity

The amount or number of a material or product, which can be measured or counted.

Cost Data

Information related to the expenses incurred in the production of goods or services, including material, labor, and overhead costs.

Not-For-Profit Organization

An organization that does not operate for the benefit of private interests and focuses on serving a public or mutual cause.