Question

For 2018. Franklin Manufacturing uses machine-hours as the only overhead cost-allocation base. The estimated manufacturing overhead cost are $300,000 and estimated machine hours are 50,000. The actual manufacturing overhead costs are $420,000 and actual machine hours are 60,000. Using job costing, the 2018 budgeted manufacturing overhead rata is ____________. (Round the final answer to the nearest cent.) A. $5.00 par machine-hour B. $8.40 per machete-hour C. $6,00 per machine-hour D $7,00 per machine-hour

Answer 1

Answer:

Using job costing, the 2018 budgeted manufacturing overhead rate is C. $6,00 per machine-hour

Explanation:

Manufacturing Overheads are absorbed in the production process at their Budgeted Rate multiplied by the Actual Activity during the period.

Budgeted Rate. = Total Budgeted Overhead Cost / Total Budgeted Activity

Total Budgeted Activity is the allocation base used to allocate the Overhead Cost. Franklin Manufacturing uses machine-hours as the only overhead cost-allocation base.

Thus the Budgeted Rate = $300,000/ 50,000

                                          = $ 6.00 per machine hour