Question

Wolf Manufacturing expects the following overhead costs in 2011:
Indirect material.......... $ 45,000
Indirect labor........... 55,000
Depreciation of machinery...... 160,000
Repair and maintenance on machinery... 135,000
Utilities and taxes.......... 55,000
Total............... $450,000
It expects to use 25,000 direct labor hours at a cost of $525,000 and 15,000 machine hours during the year.

Required
Justify the selection of an appropriate allocation base, and calculate the predetermined overhead allocation rate.



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  • CreatedSeptember 12, 2013
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