Question

Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. The pre-determined overhead rate based on machine hours is:________.
a. $48 per machine hour.
b. $62 per machine hour.
c. $45 per machine hour.
d. $50 per machine hour.

Answer 1

Answer:

overhead rate will be equal to $62 per machine hour

So option (B) will be correct option

Explanation:

We have given total overhead for the current year will be $15500000 with total 250000 machine hours.

And actual overhead is $16000000 and actual machine hour is 330000 hours

We have to find the overhead rate based on machine hour

Overhead rate is the ratio of estimated overhead to estimated total machine hours

So overhead rate $=\frac{15500000}{250000}=62$ $ per machine hour

So overhead rate will be equal to $62 per machine hour

So option (B) will be correct option