(Appendix 11A)Oldham Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $4.00 per machine-hour and fixed manufacturing overhead cost of $87, 822 per period.If the denominator level of activity is 4, 100 machine-hours, the fixed component in the predetermined overhead rate would be:
A)$25.42
B)$4.00
C)$21.42
D)$400.00

Question

Quizplus · Accepted Answer

Fixed component of predetermined overhead rate = Estimated total fixed manufacturing overhead cost ÷ Estimated total amount of the allocation base = $87, 822 ÷ 4, 100 machine-hours = $21.42 per machine-hour

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