Question

Pinnacle Corp. budgeted $259,470 of overhead cost for the current year. Actual overhead costs for the year were $209,420. Pinnacle's plantwide allocation base, machine hours, was budgeted at 49,190 hours. Actual machine hours were 56,270. A total of 102,050 units was budgeted to be produced and 98,000 units were actually produced. Pinnacle's plantwide factory overhead rate for the current year is:

Answer 1

Predetermined manufacturing overhead rate= $5.275 per machine-hour

Step-by-step explanation:

Giving the following information:

Pinnacle Corp. budgeted $259,470 of overhead cost for the current year.

Pinnacle's plantwide allocation base, machine hours, was budgeted at 49,190 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= 259,470/49,190

Predetermined manufacturing overhead rate= $5.275 per machine-hour