Question

Pinacle Corp. budgeted $242,600 of overhead cost for the current year. Actual overhead costs for the year were $204,330. Pinacle's plantwide allocation base, machine hours, was budgeted at 51,060 hours. Actual machine hours were 56,680. A total of 102,310 units was budgeted to be produced and 98,000 units were actually produced. Pinacle's plantwide factory overhead rate for the current year is: a.$4.00 per machine hour b.$4.75 per machine hour c.$2.00 per machine hour d.$2.37 per machine hour

Answer 1

Predetermined manufacturing overhead rate= $4.75 per machine hour

Step-by-step explanation:

Giving the following information:

Pinacle Corp. budgeted $242,600 of overhead cost for the current year.

Estimated machine hours= 51,060 hours

To calculate the predetermined 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= 242,600 / 51,060

Predetermined manufacturing overhead rate= $4.75 per machine hour