The "Wrap rate" should be included: a) Direct and Indirect cost / rate (overhead), b) Other procurement service cost, C) Cost of Money (CAS 414), and D) Profit / fee.
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Predetermined overhead rate based on direct labor cost = Budgeted overhead cost / direct labor cost / 100 Predetermined overhead rate based on direct labor cost = budgeted overhead cost / direct labor hours.
Increase in overhead rate would have negative financial impact since its one of the cost under the income statement. Increased in overhead rate would lead to increase in costs, which eventually would lead to lower income. Sales - Direct material - Direct labor - Overhead = Profit
Predetermined overhead rate = Est. total Manuf. Overhead Cost / Est. total amt of allocation base In this case, allocation base would be direct labor (as opposed to machine labor). Hope this helps
false, direct labor and manufacturing overhead = conversion cost
Well, honey, if manufacturing overhead is 20% of total conversion costs, and direct labor is $38,000 and direct materials are $47,000, then total conversion costs would be $38,000 + $47,000 = $85,000. So, if manufacturing overhead is 20% of that, it would be 0.20 x $85,000 = $17,000. So, the manufacturing overhead would be $17,000.