Question

Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated machine-hours 35,900 Estimated variable manufacturing overhead $ 6.73 per machine-hour Estimated total fixed manufacturing overhead $ 801,288 Actual machine-hours for the year 33,300 The predetermined overhead rate for the recently completed year was closest to:

Answer 1

Answer:

Calculation predetermined overhead rate for the recently completed year :

Particulars	Amount	Amount
Estimated variable manufacturing o.h		$ 6.73
Estimated machine hrs		.35,900
Total variable manufacturing cost	= $ 6.73*35,900 = $ 2,41,607	$ 2,41,607
Total fixed manufacturing o.h		$ 8,01,288
Estimated total manufacturing overhead	= $ 2,41,607 + $ 8,01,288 = $ 10,42,897	$ 10,42,897
Estimated Machine hrs		35,900
Predetermined overhead rate	= $ 10,42,897 / 35,900 = $ 29.05	$ 29.05 per machine hr