(Appendix 11A)Odonell Corporation estimates that its variable manufacturing overhead is $11.20 per machine-hour and its fixed manufacturing overhead is $563, 640 per period. If the denominator level of activity is 6, 100 machine-hours, the predetermined overhead rate would be:
A)$11.20 per machine-hour
B)$1, 120.00 per machine-hour
C)$92.40 per machine-hour
D)$103.60 per machine-hour

Question

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total manufacturing overhead ÷ Denominator level of activity
= [$563, 640 + ($11.20 per machine-hour × 6, 100 machine-hours)] ÷ 6, 100 machine-hours
= [$563, 640 + $68, 320] ÷ 6, 100 machine-hours
= $631, 960 ÷ 6, 100 machine-hours
= $103.60 per machine-hour

(Appendix 11A)Odonell Corporation Estimates That Its Variable Manufacturing Overhead Is