Western, Inc. is a technology consulting firm focused on Web site development and integration of Internet business applications. The president of the company expects to incur $ 640,000 of indirect costs this year, and she expects her firm to work 4,000 direct labor hours. Western's systems consultants provide direct labor at a rate of $ 280 per hour. Clients are billed at 160% of direct labor cost. Last month, Western's consultants spent 170 hours on Halbert's engagement. Compute Western's predetermined overhead allocation rate per direct labor hour.

Estimated manufacturing overhead rate= $160 per direct labor hour

Explanation:

Giving the following information:

Estimated overhead= $640,000

Estimated direct labor hours= 4,000

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 640,000/4,000

Estimated manufacturing overhead rate= $160 per direct labor hour

answer; lags, push the econ below the natural level of output;