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Nonamiya [84]
2 years ago
9

West Company estimates that overhead costs for the next year will be $3,800,000 for indirect labor and $970,000 for factory util

ities. The company uses machine hours as its overhead allocation base. If 106,000 machine hours are planned for this next year, what is the company's plantwide overhead rate?
Business
1 answer:
nalin [4]2 years ago
3 0

Answer: $45 per machine hour

Explanation:

Company uses machine hours as its overhead allocation base and there were 106,000 machine hours planned.

The overheads are $3,800,000 for indirect labor and $970,000 for factory utilities.

The rate will therefore be;

= Total Overhead / Machine hours

= (3,800,000 + 970,000) / 106,000

= $45 per machine hour

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A) Depreciation on the company's equipment for 2017 is computed to be $16,000.
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