Garrity Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $6.80 per machine-hour and fixed manufacturing overhead cost of $503,272 per period.If the denominator level of activity is 7,600 machine-hours, the variable element in the predetermined overhead rate would be:
A)$6.80
B)$72.16
C)$66.22
D)$73.02

Question

Quizplus · Accepted Answer

The variable element in the predetermined overhead rate is the variable manufacturing overhead cost per machine hour, which is $6.80 as given in the problem. Therefore, the correct answer is A. As given $6.80.

Garrity Corporation Bases Its Predetermined Overhead Rate on Variable Manufacturing