Answer:
Predetermined manufacturing overhead rate= $126 per machine-hour
Explanation:
Giving the following information:
Estimated machine-hours= 2,000
Depreciation on factory equipment $100,000
Indirect labor payroll 14,000
Wages of factory Janitors 70,000
Utilities for factory 34,000
Rent on factory building 24,000
Factory insurance 10,000
Total estimated overhead= $252,000
<u>To calculate the predetermined overhead rate, we need to use the following formula:</u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 252,000/2,000
Predetermined manufacturing overhead rate= $126 per machine-hour
