Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.
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:
A) $34.06
B) $34.90
C) $34.67
D) $35.52

Question

Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.
  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:
A) $34.06 
B) $34.90 
C) $34.67 
D) $35.52

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base
= $157,050 ÷ 4,500 machine-hours
= $34.90 per machine-hour

Acheson Corporation, Which Applies Manufacturing Overhead on the Basis of Machine-Hours