Question

Thomlin Company forecasts that total overhead for the current year will be $11,742,000 with 164,000 total machine hours. Year to date, the actual overhead is $7,547,000 and the actual machine hours are 83,000 hours. The predetermined overhead rate based on machine hours is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours. a.$46 per machine hour b.$141 per machine hour c.$91 per machine hour d.$72 per machine hour

Answer 1

d.$72 per machine hour

Step-by-step explanation:

Predetermined overhead rate = Budgeted Overheads ÷ Budgeted Activity

therefore,

Predetermined overhead rate = $11,742,000 ÷ 164,000

= $71.598 or $72

The predetermined overhead rate based on machine hours is $72 per machine hour.