Question

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 $8.52 per machine-hour and the estimated total fixed manufacturing overhead was $256,500. The predetermined overhead rate for the recently completed year was closest to:

Answer 1

Answer:

Total overhead rate =  $34.17  per machine hour

Explanation:

The total overhead rate would  the sum of the variable overhead rate and the fixed overhead rate

The pre-determined fixed overhead absorption rate = Estimated fixed overhead /Estimated machine hours

DATA:

Estimated overhead       - $256,500.

Estimated machine hours -  10,000 machine hours

The pre-determined fixed overhead absorption rate =

$256,500/ 10,000 machine hours = 25.65  per hour

The pre-determined overhead absorption rate = $25.65  per hour

Total overhead rate = Variable rate + Fixed rate

                                 = $8.52 +  $25.65 = $34.17

Total overhead rate =  $34.17  per machine hour