(Appendix 11A)Hairr Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $9.50 per machine-hour and fixed manufacturing overhead cost of $947, 672 per period.If the denominator level of activity is 8, 900 machine-hours, the predetermined overhead rate would be:
A)$9.50
B)$115.98
C)$106.48
D)$950.00

Question

Quizplus · Accepted Answer

Fixed component of predetermined overhead rate = Estimated total fixed manufacturing overhead cost ÷ Estimated total amount of the allocation base
= $947, 672 ÷ 8, 900 machine-hours = $106.48 per machine-hour
Predetermined overhead rate = $9.50 per machine-hour + $106.48 per machine-hour = $115.98 per machine-hour

(Appendix 11A)Hairr Corporation Bases Its Predetermined Overhead Rate on Variable