A company estimates that costs for the next year will be $600,000 for indirect labor,$40,000 for factory utilities,and $1,000,000 for the CEO's salary.The company uses machine hours as its overhead allocation base.If 80,000 machine hours are planned for this next year,then the plantwide overhead rate is $8 per machine hour.

Question

Quizplus · Accepted Answer

($600,000 + $40,000)/80,000 machine hours = $8 per machine hour

A Company Estimates That Costs for the Next Year Will