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The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be $160,000, and total direct labor costs would be $100,000. During February, the actual direct labor cost totaled $13,500, and factory overhead cost incurred totaled $21,950.What is the predetermined factory overhead rate based on direct labor cost?

Respuesta :

Answer:

$21,950

Explanation:

Factory overhead is fixed cost, which is not dependent on level of production volume while direct labour cost moves with the level of product unit manufactured during a period. Althought actual direct labor cost is lower than forecasted one, predetermined factory overhead for February should be same as actual amount, which is $21,950.

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