ECONOMICS

Detailed explanation-1: -You may also calculate the overhead rate based on direct labor hours. Divide the overhead costs by the direct labor hours over the same measurement period. In the example, the overhead rate is $20 for each direct labor hour ($2, 000/100).

Detailed explanation-2: -Manufacturing overhead applied are the overhead costs added or applied to each job during the production process. These costs are added to work-in-process to become part of total manufacturing costs along with direct materials and direct labor.

Detailed explanation-3: -Answer: Machine Hour Rate: Machinery hour rate means the expenses incurred while running a machine for one hour. No doubt, it is quite logical and-scientific method for absorption of factory overheads used in production.

Detailed explanation-4: -This process of recovering overheads of a department or any other cost center from its output is called recovery or absorption.