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Nata [24]
3 years ago
7

ABC Company estimates total overhead costs to be $1,200,000 and will apply overhead to units produced based on 200,000 estimated

machine hours. During the year ABC Company incurred actual overhead costs of $1,250,000 and achieved 250,000 machine hours. ABC Company's predetermined overhead rate is:
Business
1 answer:
mr_godi [17]3 years ago
7 0

Answer:

$6 per machine hour

Explanation:

Predetermined overhead rate=Estimated total overhead/Estimated machine hours

Predetermined overhead rate = $1,200,000 / 200,000 hours  

Predetermined overhead rate = $6 per machine hour.

Thus, the predetermined overhead rate is $6 per machine hour

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