Question

Wood Manufacturing is a small textile manufacturer using machineminushours as the​ single, plantminuswide predetermined cost driver rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Winfield High School band jacket​ job: Company Winfield High School Job Direct materials ​$40,000 ​$1,000 Direct labor ​$10,000 ​$ 200 Manufacturing overhead costs ​$30,000 Machineminushours ​100,000 900 For Wood​ Manufacturing, what is the annual manufacturing overhead cost driver​ rate? A. ​$0.30 per machine hour B. ​$0.80 per machine hour C. ​$33.33 per machine hour D. ​$0.50 per machine hour

Answer 1

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Manufacturing overhead costs ​$30,000

Machine-hours= ​100,000

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= 30,000/100,000= $0.3 per machine hour.