Dallas company uses a job order costing system. the company's executives estimated that direct labor would be $3,360,000 (240,000 hours at $14/hour) and that factory overhead would be $1,540,000 for the current period. at the end of the period, the records show that there had been 220,000 hours of direct labor and $1,240,000 of actual overhead costs. using direct labor hours as a base, what was the predetermined overhead rate? (round your answer to two decimal places.)
a) $5.17 per direct labor hour.
b) $7.00 per direct labor hour.
c) $6.42 per direct labor hour.
d) $5.84 per direct labor hour.
e) $6.25 per direct labor hour.

Option (C) is correct.

Explanation:

Given that,

Estimated overhead cost = $1,540,000

Estimated direct labors (in dollars) = $3,360,000

Estimated direct labor hours = 240,000

Actual overhead cost = $1,240,000

Predetermined overhead rate:

= Estimated overhead cost ÷ Estimated direct labor hours

= $1,540,000 ÷ 240,000

= $6.42 per direct labor hour

you will have $2593.74 in 10 years if you set aside $1,000 at 10%

you will have $9321.91 in 20 years if you set aside $2000 at 8%

you will have $1469.32 in 5 years if you set aside $1000 at 8%

you will have $1296.87 in 10 years if you set aside $500 at 10%

you will have $239.66 in 15 years if you set aside $100 at 6%

you will have $4660.96 in 20 years if you set aside $1000 at 8%