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 36,000 Estimated variable manufacturing overhead $3.01 per machine-hour Estimated total fixed manufacturing overhead $1,058,040 The predetermined overhead rate for the recently completed year was closest to:

Answer 1

Answer:

$30.39 per machine hour

Explanation:

Giannitti corporation has an estimated machine hours of 36,000

The estimated variable manufacturing overhead is $3.01 per machine hour

The estimated total fixed manufacturing overhead is $1,058,040

The first step is to calculate the the predetermined overhead rate

= 36,000 + 3.01 + 1,058,040

= $1,094,043.01

Therefore the predetermined overhead rate can be calculated as follows

= 1,094,043.01/36,000

= $30.39 per machine hour

Hence the predetermined overhead rate for the recently completed year is closest to $30.39 per machine hour