Mco recomputes its predetermined overhead rate every month


Problem - MCO, LLC has budgeted fixed manufacturing overhead of $133,000 for November, which includes depreciation of $17,290 but is otherwise all current cash outlays. Their direct labor budget indicates that the month's production will need 20,556 direct labor hours. Budgeted variable manufacturing overhead is based on direct labor hours, and the variable overhead rate is $14.10 per direct labor hour.

MCO recomputes its predetermined overhead rate every month. What should they calculate the predetermined overhead rate for November to be?

A. $20.57

B. $12.10

C. $12.94

D. $6.47

E. $26.20

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Accounting Basics: Mco recomputes its predetermined overhead rate every month
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