Question

H Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated manufacturing overhead from the beginning of the year $ 310,000 Estimated activity level from the beginning of the year 20,000 machine-hours Actual total fixed manufacturing overhead $ 338,000 Actual activity level 18,300 machine-hours The predetermined overhead rate is closest to:

Answer 1

Answer:

Estimated manufacturing overhead rate= $15.5 per machine hour.

Explanation:

Giving the following information:

H Corporation uses a predetermined overhead rate base on machine-hours.

Estimated manufacturing overhead from the beginning of the year $ 310,000 Estimated activity level from the beginning of the year 20,000 machine-hours.

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base= 310000/20000= $15.5 per machine hour.