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My name is Johnson Joseph, based in Nigeria, I have been lecturing Cost Accounting and performance management for over 10 years. i can join your team to make questions on certain/selected topics available

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Oct 14, 2015 · Wert Corporation uses a predetermined overhead rate based on direct labor cost to apply. manufacturing overhead to jobs. Last year, the company’s estimated manufacturing overhead. was $1,500,000 and its estimated level of activity was 50,000 direct labor-hours. The. company’s direct labor wage rate is $12 per hour. Actual manufacturing ...

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Jul 16, 2019 · The first step is to calculate the production overhead to be applied to the batch based on the predetermined rate. Production overhead = Direct labor hours x Predetermined rate Production overhead = 30 x 12.00 = 360 Batch Cost Calculation. Information from the batch cost sheet is used to calculate the production cost and unit cost as follows.

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Standard variable overhead rate $3.75 per hour >>$250 Favorable Unfavorable labor rate variances may occur as a result of: >>skilled workers being assigned to jobs requiring little skill. >>overtime premiums being charged to the direct labor account. The volume variance = the fixed component of the predetermined overhead rate x (Denominator hours Overhead expenses are all costs on the income statement except for direct labor, direct materials, and direct expenses. Overhead expenses include accounting fees, advertising , insurance , interest, legal fees, labor burden, rent , repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.

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The rate is applied to direct labor, as incurred on projects, to allow a firm to recover the appropriate share of indirect costs allowable per the terms of the agreement. The term is commonly referred to as the “overhead rate.” Lump‐Sum Payment ‐ Payment of an agreed total dollar amount (which includes wages, overhead, direct expenses ...

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A predetermined overhead rate (or overhead application rate) is a charge per unit of activity that is used to allocate (or apply) overhead cost from the Overhead Control account to Work in Process Inventory for the period’s production or services. Predetermined overhead rates are discussed in detail in Chapter 3. Management estimates that a total of 250,000 direct labor hours are worked annually. These estimates are based on the previous year’s overhead costs and direct labor hours and are adjusted for expected increases in demand the coming year. The predetermined overhead rate is $32 per direct labor hour (= $8,000,000 ÷ 250,000 direct labor hours).

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