Question

Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $316,500 for the year, and machine usage is estimated at 126,600 hours. For the year, $341,100 of overhead costs are incurred and 132,000 hours are used. (a) Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.) Manufacturing overhead rate $enter a dollar amount rounded to 2 decimal places per machine hour

Answer 1

$2.50

Step-by-step explanation:

Overhead rate = Budgeted Overheads ÷ Budgeted Activity

= $316,500 ÷ 126,600 hours

= $2.50

the manufacturing overhead rate for the year is $2.50