LO 6.1Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000
direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the
predetermined overhead rate using:
A. Direct labor hours
B. Direct labor dollars
C. Machine hours
EA2.
LO 6.1Crystal Pools estimates overhead will utilize 250,000 machine hours and cost $750,000.
It takes 2 machine hours per unit, direct material cost of $14 per unit, and direct labor of $20 per
unit. What is the cost of each unit produced?
EA3.
LO 6.1A company estimated 100,000 direct labor hours and $800,000 in overhead. The actual
overhead was $805,100, and there were 99,900 direct labor hours. What is the predetermined
overhead rate, and how much was applied during the year?
EA4.
LO 6.1Cozy, Inc., manufactures small and large blankets. It estimates $350,000 in overhead
during the manufacturing of 75,000 small blankets and 25,000 large blankets. What is the
predetermined overhead rate if a small blanket takes 1 machine hour and a large blanket takes 2
machine hours?
EA5.
LO 6.2Identify appropriate cost drivers for these cost pools:
A. setup cost pools
B. assembly cost pool
C. supervising cost pool
D. testing cost pool
