Question

Hibshman Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 10,000 machine-hours. The estimated variable manufacturing overhead was $6.82 per machine-hour and the estimated total fixed manufacturing overhead was $230, 200. The predetermined overhead rate for the recently completed year was closest to: $29.84 per machine-hour $23.15 per machine-hour $23.02 per machine-hour $6.82 per machine-hour

Answer 1

Estimated manufacturing overhead rate= $29.84 per machine hour.

Step-by-step explanation:

Giving the following information:

Hibshman Corporation bases its predetermined overhead rate on the estimated machine-hours. The Corporation estimated the machine-hours for the upcoming year at 10,000 machine-hours. The estimated variable manufacturing overhead was $6.82 per machine-hour and the estimated total fixed manufacturing overhead was $230, 200.

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= (230200/10000)+6.82= $29.84 per machine hour.