Question

Brothern 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 40,100 Estimated variable manufacturing overhead $ 6.56 per machine-hour Estimated total fixed manufacturing overhead $ 843,303 Actual machine-hours for the year 38,100 The predetermined overhead rate for the recently completed year was closest to: Multiple Choice $27.26 per machine-hour $27.59 per machine-hour $21.03 per machine-hour $6.56 per machine-hour

Answer 1

Estimated manufacturing overhead rate= $27.59 per machine-hour

Step-by-step explanation:

Giving the following information:

Estimated machine-hours 40,100

Estimated variable manufacturing overhead $ 6.56 per machine-hour

Estimated total fixed manufacturing overhead $ 843,303

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

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

Estimated manufacturing overhead rate= (843,303/40,100) + 6.56= $27.59 per machine-hour