Question

Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 72,400 Estimated variable manufacturing overhead $ 3.00 per machine-hour Estimated total fixed manufacturing overhead $ 838,780 The predetermined overhead rate for the recently completed year was closest to:

Answer 1

Answer:

Overhead Rate 14.5856

Explanation:

Fixed Cost of the manufacturing overhead will be distribute over the cost driver.

$\frac{CostOf Manufacturing Overhead}{Cost Driver}= Overhead Rate$

$\frac{838780}{72400}= 11.5856$

Then we will add the fixed with the variable to get the total overhead per machine-hour

$11.5856 + 3 = 14.5658$