Harris fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. at the beginning of the year, it estimated that 20,000 direct labor-hours would be required for the period’s estimated level of production. the company also estimated $94,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. harris's actual manufacturing overhead cost for the year was $123,900 and its actual total direct labor was 21,000 hours. required: compute the company's plantwide predetermined overhead rate for the year. (round your answer to 2 decimal places.)

Predetermined overhead rate= $6.7

Explanation:

Giving the following information:

Estimated that 20,000 direct labor-hours.

Estimated $94,000 of fixed manufacturing overhead cost.

Variable manufacturing overhead of $2.00 per direct labor-hour.

Harris's actual manufacturing overhead cost for the year was $123,900 and its actual total direct labor was 21,000 hours.

Predetermined overhead rate= estimated total manufacturing overhead costs/ total amount of allocation base

Predetermined overhead rate= (94000+ 2*20000)/20000

Predetermined overhead rate= $6.7

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