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American Public University Operations And Supply Chain Management Assignment Help - Companies calculate


Question - Companies calculate overhead rates so that they can have a more accurate estimate of the cost of
production. Manufacturing overhead is often a significant component of production cost. The following
are calculations of overhead by a hypothetical company: Rent on factory building 15,000.00 Wages
paid to supervisiors 3,500.00 utilities paid for factory 1,500.00 Wages paid to production workers
8,000.00 Dep expense for production equipment 10,000.00 Estimated number of hours of direct labor
1,200.00 Required: Calculate the overhead rate on the basis of the preceding information. Use direct
labor hours as the cost driver.

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