Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year.Data for the upcoming year appear below: The predetermined overhead rate for the recently completed year was closest to:
A)$29.39 per machine-hour
B)$32.40 per machine-hour
C)$32.81 per machine-hour
D)$3.01 per machine-hour

Question

Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year.Data for the upcoming year appear below:  The predetermined overhead rate for the recently completed year was closest to:
A)$29.39 per machine-hour 
B)$32.40 per machine-hour 
C)$32.81 per machine-hour 
D)$3.01 per machine-hour

Quizplus · Accepted Answer

Estimated total manufacturing overhead = $1,058,040 + ($3.01 per machine-hour × 36,000 machine-hours)= $1,166,400
Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,166,400 ÷ 36,000 machine-hours = $32.40 per machine-hour

Giannitti Corporation Bases Its Predetermined Overhead Rate on the Estimated