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 Estimated variable manufacturing overhead Estimated total fixed manufacturing overhead 39, 700 6.32 pe $1, 159, 637 37, 500 Actual machine-hours for the year The predetermined overhead rate for the recently completed year was closest to: Multiple Choice
$6.32 per machine-hour
$29.21 per machine-hour
$35.53 per machine-hour
$35.18 per machine-hour

Answer 1

Answer:

$35.53 per machine-hour

Explanation:

Estimated machine-hours 39,700 hours

Estimated variable manufacturing overhead $6.32

Estimated total fixed manufacturing overhead $1,159,637

Actual machine-hours for the year 37,500 hours

Predetermined overhead = Estimated total fixed manufacturing overhead / Estimated machine-hours

Predetermined overhead = ($1,159,637 / 39,700 hours) + $6.32

Predetermined overhead = $29.21 + $6.32 = $35.53 per hour