Question

The Thomlin Company forecasts that total overhead for the current year will be $11,571,000 with 196,000 total machine hours. Year to date, the actual overhead is $7,833,000 and the actual machine hours are 87,000 hours. If the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date), the overhead is

Answer 1

Answer:

$59 per machine hour

Explanation:

Given that

Total overhead = $11,571,000

Total machine hours = 196,000

Actual overhead = $7,833,000

Actual machine hours = 87,000 hours

To get the overhead rate, please note that the formula for predetermined fixed overhead rate will be applied.

Therefore,

Predetermined fixed overhead rate = Estimated overhead / Estimated machine hours

Predetermined fixed overhead rate = $11,571,000 / 196,000 hour

= $59 per machine hour