Managerial Accounting

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Roate Compute Predetermined Overhead Rate For Coming Year


At the beginning of the year, Roate Co. estimated \$420,000 in manufacturing overhead, 20,000 direct labor hours and 50,000 machine hours. Actual manufacturing costs at the end of the year were \$425,000 in manufacturing overhead. During the year, 22,000 direct labor hours and 47,000 machine hours were incurred. If overhead is applied based on direct labor hours, what is the predetermined overhead rate for the coming year?