Question

Dead Eye Putters manufactures golf putters in three models: P450, Q550, and R650. Manufacturing overhead is assigned to each putter model using a predetermined overhead rate and the direct labor hours actually used in manufacturing each putter model. The firm calculates the overhead rate before the year begins using a flexible budget. Budgeted volume is measured using direct labor hours. The following data summarize the budgeted and actual production for the fiscal year:


After the fiscal year ends, Dead Eye Putters reports $ 884,713 under absorbed overhead and actual overhead incurred of $ 25,875,026. Variable overhead was budgeted to be $ 3.50 per direct labor hour.

Required:
a. Compute Dead Eye Putter’s manufacturing overhead rate used during the year.
b. What budgeted fixed overhead did Dead Eye Putters use in computing its manufacturing overhead rate for theyear?


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  • CreatedDecember 15, 2014
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