The Little Britain Company applies overhead cost based on machine hours. At the beginning of 2011, the company estimated that manufacturing overhead would be $500,000, and machine hours would total 20,000. By 2011 year-end, actual overhead totalled $525,000, and actual machine hours were 25,000. On the basis of this information, the 2011 predetermined overhead rate was:
A)$0.04 per machine hour.
B)$0.05 per machine hour.
C)$20 per machine hour.
D)$21 per machine hour.
E)$25 per machine hour.

Question

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The Answer of The Little Britain Company applies overhead cost based on machine hours. At the beginning of 2011, the company estimated that manufacturing overhead would be $500,000, and machine hours would total 20,000. By 2011 year-end, actual overhead totalled $525,000, and actual machine hours were 25,000. On the basis of this information, the 2011 predetermined overhead rate was:
A)$0.04 per machine hour.
B)$0.05 per machine hour.
C)$20 per machine hour.
D)$21 per machine hour.
E)$25 per machine hour.

The Little Britain Company Applies Overhead Cost Based on Machine