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Avatar corporation uses a predetermined rate to apply overhead. at the beginning of the year, avatar estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000. actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000.what is the predetermined overhead rate per machine hour for avatar?

User Amitabha
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1 Answer

6 votes
Hi there

predetermined rate=estimated overhead cost÷estimated machine hours
So
predetermined rate=240000÷10000
predetermined rate=24 per machine hour

Good luck!
User JangoCG
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