(TCO 4) Kramer Company has decided to use a predetermined rate to assign factory

overhead to production. The following predictions have been made for 2010:

  Total factory overhead costs

$150,000

Direct labor hours

40,000 hours

Direct labor costs

$200,000

Machine hours

60,000 hours

Compute the predetermined factory overhead rate under the three different bases: (1) direct labor hours, (2) direct labor costs, and (3) machine hours.

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