Mollie's Lollie Manufacturer has budged total overhead to be $269 500 and the expected cost driver is 55 000 machine hours. Last year actual machine hours was 50 000. The predetermined indirect cost rate is.
A) $5.39
B) $1.10
C) $.20
D) $4.90

Question

Quizplus · Accepted Answer

The predetermined indirect cost rate is calculated by dividing the total budgeted overhead by the expected cost driver. So, $269,500 / 55,000 machine hours = $4.90 per machine hour.

Mollie's Lollie Manufacturer Has Budged Total Overhead to Be $269