Question

rothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated machine-hours 33,100 Estimated variable manufacturing overhead $5.72 per machine-hour Estimated total fixed manufacturing overhead $770,568 Actual machine-hours for the year 30,800 The predetermined overhead rate for the recently completed year was closest to:

Answer 1

Predetermined manufacturing overhead rate= $29 per machine hour

Step-by-step explanation:

Giving the following information:

Estimated machine-hours 33,100

Estimated variable manufacturing overhead $5.72 per machine-hour

Estimated total fixed manufacturing overhead $770,568

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

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

Predetermined manufacturing overhead rate= (770,568/33,100) + 5.72

Predetermined manufacturing overhead rate= $29 per machine hour