Question

Jackson Inc. listed the following data for 2019: Budgeted factory overhead $1,290,000 Budgeted direct labor hours 75,000 Budgeted machine hours 43,000 Actual factory overhead 1,130,100 Actual direct labor hours 88,000 Actual machine hours 41,100 Assuming Jackson Inc. applied overhead based on machine hours, the firm's predetermined overhead rate for 2019 (round calculations to 2 significant digits) is:

Answer 1

$30 per machine hour

Step-by-step explanation:

The firm's predetermined overhead rate for 2019 is computed as;

= Budgeted factory overhead / Budgeted machine hours

Given that;

Budgeted factory overhead = $1,290,000

Budgeted machine hours = 43,000 hours

Predetermined over head rate = $1,290,000 / 43,000 = $30 per machine hour