(Appendix 10A) A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
The following data pertain to operations for the most recent period:

-The predetermined overhead rate per MH is closest to:
A) $20.93 per MH
B) $19.86 per MH
C) $19.50 per MH
D) $20.55 per MH

Question

(Appendix 10A) A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
  The following data pertain to operations for the most recent period:
 
-The predetermined overhead rate per MH is closest to:
A) $20.93 per MH 
B) $19.86 per MH 
C) $19.50 per MH 
D) $20.55 per MH

Quizplus · Accepted Answer

Variable overhead + Fixed overhead = $28,490+ $47,545
Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $76,035 ÷ 3,700 MHs = $20.55 per MH

(Appendix 10A) a Manufacturing Company Has a Standard Costing System