Dejarnette Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:

-The predetermined overhead rate is closest to:

Question

Dejarnette Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:
 
-The predetermined overhead rate is closest to:

Quizplus · Accepted Answer

Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $36,000 + ($2.80 per direct labor-hour × 10,000 direct labor-hours) = $36,000 + $28,000 = $64,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $64,000 ÷ 10,000 direct labor-hours = $6.40 per direct labor-hour

Dejarnette Corporation Uses a Job-Order Costing System with a Single