At the beginning of this year, a manufacturer estimates total direct materials costs of and total overhead costs of . In June of this year, the company used direct materials of in its Mixing department and in its Packaging department.

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Calculate the predetermined overhead rate as a percentage of direct materials cost.

Predetermined overhead rate
%
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Ask by Barker Ward. in the United States

Mar 21,2025

Question

At the beginning of this year, a manufacturer estimates total direct materials costs of and total overhead costs of . In June of this year, the company used direct materials of in its Mixing department and in its Packaging department.

Complete this question by entering your answers in the tabs below.
Required
Required B

Calculate the predetermined overhead rate as a percentage of direct materials cost.

Predetermined overhead rate
%
Previous
Next

Ask by Barker Ward. in the United States

Mar 21,2025

UpStudy AI · Accepted Answer

1. Write the formula for the predetermined overhead rate as a percentage of direct materials cost:

$$
   \text{Predetermined Overhead Rate} = \frac{\text{Estimated Overhead Costs}}{\text{Estimated Direct Materials Costs}} \times 100\%
   $$

2. Use the given estimates in the formula:

$$
   \text{Predetermined Overhead Rate} = \frac{2,353,200}{1,060,000} \times 100\%
   $$

3. Calculate the division:

$$
   \frac{2,353,200}{1,060,000} = 2.22
   $$

4. Multiply by 100 to convert to a percentage:

$$
   2.22 \times 100\% = 222\%
   $$

Thus, the predetermined overhead rate as a percentage of direct materials cost is $$222\%$$.
The predetermined overhead rate is 222%.