Question

Pinacle Corp. budgeted $229,130 of overhead cost for the current year. Actual overhead costs for the year were $209,320. Pinacle's plantwide allocation base, machine hours, was budgeted at 45,320 hours. Actual machine hours were 44,020. A total of 100,250 units was budgeted to be produced and 98,000 units were actually produced. Pinacle's plantwide factory overhead rate for the current year is:

Answer 1

Predetermined manufacturing overhead rate= $5.07 per machine hour

Step-by-step explanation:

Giving the following information:

Pinacle Corp. budgeted $229,130 of overhead cost for the current year. Pinacle's plantwide allocation base, machine hours, was budgeted at 45,320 hours.

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= 229,130 / 45,230

Predetermined manufacturing overhead rate= $5.07 per machine hour