Question

ackson Inc. listed the following data for 2019: Budgeted factory overhead $1,530,000 Budgeted direct labor hours 90,000 Budgeted machine hours 42,500 Actual factory overhead 1,250,000 Actual direct labor hours 87,800 Actual machine hours 40,900 Assuming Jackson Inc. applied overhead based on machine hours, the firm's predetermined overhead rate for 2019 (round calculations to 2 significant digits) is:

Answer 1

Answer: $36 per machine hour

Explanation:

Assuming Jackson Inc. applied overhead based on machine hours, the firm's predetermined overhead rate for 2019 would be calculated by dividing the budgeted factory overhead by the budgeted machine hours. This will be:

= $1,530,000 / 42,500

= $36 per machine hour