In december 2016, shire computers management establishes the 2017 predetermined overhead rate based on direct labor cost. the information used in setting this rate includes estimates that the company will incur $747,500 of overhead costs and $575,000 of direct labor cost in year 2017. during march 2017, shire began and completed job 13-56. 1. what is the predetermined overhead rate for 2017

redetermined overhead rate= 1.3

Explanation:

Giving the following information:

In December 2016, Shire Computers management establishes the 2017 predetermined overhead rate based on direct labor cost.

The information used in setting this rate includes estimates that the company will incur $747,500 of overhead costs and $575,000 of direct labor cost in the year 2017.

predetermined overhead rate= total estimated manufacturing overhead/ total amount of allocation base

predetermined overhead rate=747500/ 575000= 1.3

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