Question

Hibshman Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the machine-hours for the upcoming year at 10,000 machine-hours. The estimated variable manufacturing overhead was $6.82 per machine-hour and the estimated total fixed manufacturing overhead was $230,200. The predetermined overhead rate for the recently completed year was closest to: A) $23.15 per machine-hour B) $6.82 per machine-hour C) $29.84 per machine-hour D) $23.02 per machine-hour

Answer 1

Answer:

total predetermined overhead rate = $29.84 per machine hours

so correct option is C) $29.84 per machine-hour

Explanation:

given data

machine hours = 10,000

variable manufacturing overhead = $6.82

fixed manufacturing overhead = $230,200

to find out

predetermined overhead rate

solution

we know that here variable  manufacturing overhead so

estimated fixed overhead rate will be

estimated fixed overhead rate = $\frac{230200}{10000}$

estimated fixed overhead rate = $23.02 per machine hour

and

total predetermined overhead rate is here

total predetermined overhead rate = $6.82 + $23.02

total predetermined overhead rate = $29.84 per machine hours

so correct option is C) $29.84 per machine-hour