The predetermined overhead rate if Barr bases the rate on direct labor hours is 10 per hour.
Predetermined overhead rate
Using this formula
Predetermined overhead rate=Estimated overhead/Estimated production labor hours
Where:
Estimated overhead=$900,000
Estimated production=90,000 labor hours
Let plug in the formula
Predetermined overhead rate= $900,000 / 90,000
Predetermined overhead rate= 10 per hour
Inconclusion the predetermined overhead rate if Barr bases the rate on direct labor hours is 10 per hour.
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