Acton Corporation, which applies manufacturing overhead on the
basis of machine-hours, has provided the following data for its
most recent year of operations.
Estimated manufacturing overhead | $176,700 |
Estimated machine-hours | 1,900 |
Actual manufacturing overhead | $168,100 |
Actual machine-hours | 1,820 |
The estimates of the manufacturing overhead and of machine-hours
were made at the beginning of the year for the purpose of computing
the company's predetermined overhead rate for the year.
The predetermined overhead rate is closest to:
$93.00
$92.81
$92.36
$92.17
Option A
Predetermined overhead rate=Estimated manufacturing overheads/Estimated Machine Hours
=$176,700/1,900
=$93
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