Doric Agricultural Corporation uses a predetermined overhead allocation rate based on the direct labor cost. The manufacturing overhead cost allocated during the year is $270,000. The details of production and costs incurred during the year are as follows: Actual direct materials cost $811,500 Actual direct labor cost $170,000 Actual overhead costs incurred $260,000 Total direct labor hours 5580 hoursWhat is the predetermined overhead allocation rate applied by the corporation? (Round your answer to two decimal places.) Group of answer choices 96.30% 158.82% 65.38% 33.27%
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Doric Agricultural Corporation uses a predetermined
| Actual direct materials cost | $811,500 |
| Actual direct labor cost | $170,000 |
| Actual overhead costs incurred | $260,000 |
| Total direct labor hours | 5580 hours |
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