Question

Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 36,000 Estimated variable manufacturing overhead $ 3.01 per machinehour Estimated total fixed manufacturing overhead $ 1,058,040 The predetermined overhead rate for the recently completed year was closest to:_______
A) $29.39 per machine-hour
B) $32.40 per machine-hour
C) $32.81 per machine-hour
D) $3.01 per machine-hour

Answer 1

Answer:

A) $29.39 per machine-hour

Explanation:

Fixed overhead rate = Estimated total fixed manufacturing overhead / Estimated machine hours

Fixed overhead rate = $1,058,040 / 36,000

Fixed overhead rate = $29.39

Predetermined Overhead rate = Fixed overhead rate + Variable overhead rate

Predetermined Overhead rate = $29.39  $3.01

Predetermined Overhead rate = $29.39301

Predetermined Overhead rate = $29.39