Question

Dane Company budgets total overhead cost of $7,200,000. The company allocates overhead cost based on 100,000 budgeted direct labor hours. The single plantwide overhead rate is:

Answer 1

The single plantwide overhead rate is:$72 per direct labor hour.

Single plantwide overhead rate

Using this formula

Single plantwide overhead rate= Budgeted total overhead cost/Budgeted direct labor hours

Where:

Budgeted total overhead cost=$7,200,000

Budgeted direct labor hours=100,000

Let plug in the formula=$7,200,000/100,000

Single plantwide overhead rate=$72 per direct labor hour

Inconclusion the single plantwide overhead rate is:$72 per direct labor hour.

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