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Reptile [31]
3 years ago
9

Stones Corporation uses a predetermined overhead rate based on machine-hours to apply overhead to the manufacturing process. Las

t year, Stones incurred manufacturing overhead costs totaling $450,000 and used 100,000 machine-hours. This year, Stones estimated manufacturing overhead to be $550,000 and expected to incur 110,000 machine-hours. Stones actually incurred $575,000 of manufacturing overhead and incurred 120,000 machine-hours this year. What is the manufacturing overhead application rate
Business
1 answer:
likoan [24]3 years ago
8 0

Answer: $5 per machine hour

Explanation:

Given the following :

Estimated manufacturing overhead cost = $550,000

Expected machine-hour to be incurred = 110,000

Actual manufacturing overhead = $575,000

Actual machine hour incurred = 120,000

The manufacturing overhead application rate:

Expected manufacturing overhead cost / Expected machine hour to be incurred

= $550,000 / 110,000 machine hour

= $5 per machine hour

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