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 $ 8 comma 000 comma 000. Estimated machine hours are 35 comma 000. During the​ year, the actual machine hours used were 31 comma 000. Calculate the predetermined overhead allocation rate.​ (Round your answer to the nearest​ dollar.)
A) $163
B) $109
C) $280
D) $82

Answer 1

Answer:

predetermined overhead allocation rate is $228 per hour

Explanation:

given data

Estimated over head costs = $8,000,000

Estimated machine hours = 35,000

actual machine hours = 31,000

to find out

predetermined overhead allocation rate

solution

we know that predetermined overhead allocation rate is express as

predetermined overhead allocation rate = $\frac{estimate overhead cost}{estimate machine hour}$

put here value

predetermined overhead allocation rate = $\frac{8000000}{35000}$

predetermined overhead allocation rate = $228.571

so predetermined overhead allocation rate is $228 per hour