# Privack Corporation has a standard cost system in which it applies overhead to products based on...

## Question:

Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

 Variable overhead cost per direct labor-hour $2.00 Total fixed overhead cost per year$250,000 Budgeted standard direct labor-hours (denominator level of activity) 40,000 Actual direct labor-hours 39,000 Standard direct labor-hours allowed for the actual output 38,000

Required

1. Compute the predetermined overhead rate for the year. (Round Predetermined overhead rate to 2 decimal places.)

 Total fixed overhead cost per year _____ Total variable overhead cost _____ Total overhead cost at the denominator level of activity _____ Budgeted standard direct labor-hours _____ Predetermined overhead rate _____

2. Determine the amount of overhead that would be applied to the output of the period. (Round Predetermined overhead rate to 2 decimal places.)

 Standard direct labor-hours allowed for the actual output _____ Predetermined overhead rate _____ Overhead applied _____

The predetermined overhead rate is the predetermined amount of overhead cost that will be applied to each unit of production based on its consumption of the cost driver for the period.

1.) The predetermined rate is:

 Total fixed overhead cost per year $250,000 Total variable overhead cost 80,000 ($2.00 x 40,000 hours) Total...

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