Question

​Treasurers, Inc., a manufacturer of gift​ articles, uses a single plantwide rate to allocate indirect costs with machine hours as the allocation base. Estimated overhead costs for the year are $ 9 comma 000 comma 000. Estimated machine hours are 30 comma 000. During the​ year, the actual machine hours used were 36 comma 000. Calculate the predetermined overhead allocation rate.

Answer 1

Answer:

Estimated manufacturing overhead rate=$300 per machine-hour

Explanation:

Giving the following information:

The estimated overhead costs for the year are $9,000,000.

The estimated machine hours are 30,000.

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= 9,000,000/30,000= $300 per machine-hour