Question

Thomlin Company forecasts that total overhead for the current year will be $7,584,000 with 158,000 total machine hours. Year to date, the actual overhead is $3,818,000, and the actual machine hours are 83,000 hours. The predetermined overhead rate based on machine hours is Round the answer to the nearest dollar. a.$46 per machine hour b.$24 per machine hour c.$91 per machine hour d.$48 per machine hour

Answer 1

Answer:

(D) $48 per machine hour

Explanation:

The predetermined overhead rate is given by total estimated overhead divided by the total estimated machine hours

Total estimated overhead = $7,584,000

Total estimated machine hours = 158,000 hours

Predetermined rate = $7,584,000 ÷ 158,000 hours = $48 per machine hour

Answer 2

Answer:

d. $ 48 per machine hour

Explanation:

To calculate the predetermined overhead rate based on machine hours, we have to divide the total forecasted overhead cost with the forecasted overhead machine hours.

The predetermined overhead rate based on machine hours is:

$ 7,584,000  / 158,000 = $ 48 per machine hour.