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The Roget Factory has determined that its budgeted factory overhead budget for the year is $15,500,000. They plan to produce 2,000,000 units. Budgeted direct labor hours are 1,050,000 and budgeted machine hours are 750,000. Using the single plantwide factory overhead rate based on direct labor hours, calculate the factory overhead rate for the year.

$14.76
$20.67
$7.75
$77.50

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Answer:

The answer is: $14.76

Explanation:

To calculate the factory overhead rate per direct labor hour we must divide the total factory overhead cost over the total amount of direct labor hours.

Factory overhead rate = $15,5000,000 / 1,050,000 direct labor hours

Factory overhead rate = $14.76 per direct labor hour

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