Carlson Company uses a predetermined rate to apply overhead.At the beginning of the year, Carlson estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000.Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000. What is the predetermined overhead rate per machine hour for Carlson?
A) $ 6.08
B) $ 5.85
C) $24.00
D) $22.66

Question

Quizplus · Accepted Answer

The predetermined overhead rate is calculated by dividing the estimated overhead costs by the estimated machine hours: $240,000 / 10,000 machine hours = $24.00 per machine hour.

Carlson Company Uses a Predetermined Rate to Apply Overhead