Problem #$7$: Manufacturing Overhead

You have been hired as a new accountant for Bake$-$Me$-$Some$-$Bread, Inc. They have asked you to calculate the

company's

Manufacturing Overhead Rate. You are given the following data from the accounting records for last month:

Sales $ $535,000$

Cleaning supplies for the plant $ $4,500$

Salary for the plant manager $ $8,950$

Raw Materials including flour & eggs $ $13,750$

Shipping costs $($to deliver bread to stores$)$ $ $2,500$

Bread baker wages $($working on the production lines$)$ $ $89,500$

Commissions to bread salespeople $ $12,000$

Utility expense for the plant $ $42,500$

Depreciation on the factory equipment $ $25,400$

Factory supplies not directly associated with the product $ $4,500$

Legal fees $ $3,750$

Required:

$1.$ Calculate the amount of the company's Manufacturing Overhead.

$2.$ Calculate the Manufacturing Overhead Rate.

$3.$ How does calculating this rate help the company's finances?

$4.$ Explain what it means if a company has a high manufacturing rate vs$.$ a low manufacturing rate. Which rate is better;

high or low?