Question

the following data relates to mangini company's budgeted amounts for next year. budgeted:department 1department 2manufacturing overhead costs$ 320,000 $ 400,000 direct labor hours65,000dlh75,000dlhmachine hours2,000mh2,500mh what is the company's plantwide overhead rate if machine hours are the allocation base? (round your answer to two decimal places.)multiple choice$5.14 per mh$150.00 per mh$31.11 per mh$200.00 per mh$160.00 per mh

Answer 1

To find the plantwide overhead rate, divide the total budgeted manufacturing overhead costs by the total budgeted machine hours.

\[Plantwide \space Overhead \space Rate = \frac{Total \space Budgeted \space Manufacturing \space Overhead \space Costs}{Total \space Budgeted \space Machine \space Hours}\]

Using the given data:

Total Budgeted Manufacturing Overhead Costs = $320,000 + $400,000 = $720,000

Total Budgeted Machine Hours = 2,000 + 2,500 = 4,500 MH

\[Plantwide \space Overhead \space Rate = \frac{720,000}{4,500} = 160\]

Rounded to two decimal places, the plantwide overhead rate is $160.00 per machine hour.

So, the correct option is:

$160.00 per mh.