Question

Thomlin Company forecasts that total overhead for the current year will be $11,597,000 with 164,000 total machine hours. Year to date, the actual overhead is $7,833,000 and the actual machine hours are 83,000 hours. The predetermined overhead rate based on machine hours is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours. a.$94 per machine hour b.$48 per machine hour c.$71 per machine hour d.$140 per machine hour

Answer 1

Answer: c.$71 per machine hour

Explanation:

The Pre-determined Overhead rate is the rate Thomlin Company forecasted that the company would incur total overhead for the current year.

They forecasted total overhead of $11,597,000 with 164,000 total machine hours.

Since the rate is based on Machine Hours the rate would be,

= Total Forecasted Overhead / Total Forecasted Machine Hours

= 11,597,000 / 164,000

= 70.71

= $71