III. Manufacturing Overhead Co

III. Manufacturing Overhead Costs estimated $       500,000
DirectLabor Hours estimated            50,000
MachineHours estimated           250,000
DirectLabor Costs estimated $    1,000,000
Determinethe Pre-determined Overhead rate based on the following:
a DirectLabor Hours
b MachineHours
c DirectLabor Cost


Predetermined overhead rate =  Estimated manufacturingoverhead cost/Estimated total units in the allocation base

a) Predeterminedoverhead rate based on Direct labourhours

Estimated Manufacturing overheads = 500,000$

Estimated Direct labour Hours = 50,000 hours

Predetermined overhead rate based on direct labour hours=  Estimated manufacturing overhead cost/Esimated Directlabour hours

= 500,000/50,000

=$10 per direct labour hours

B) Predeterminedoverhead rate based onMachine  hours

Estimated Manufacturing overheads = 500,000$

Estimated Machine Hours = 250,000 hours

Predetermined overhead rate based on Machine hours=  Estimated manufacturing overhead cost/EstimatedMachine hours

= 500,000$/250,000

=$2 per machine hours

c)Predeterminedoverhead rate based on Direct labourcost

Predetermined overhead rate based on Direct labout cost=  Estimated manufacturing overhead cost/Estimated Directlabour cost

Estimated Manufacturing overheads = 500,000$

Estimated Direct labour coast= 100000 $


=$5 per labour cost

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