Tungsten,Inc.manufactures both normal and premium tube lights.The company allocates manufacturing overhead using a single plantwide rate with machine hours as the allocation base.Estimated overhead costs for the year are $102,000.Additional estimated information is given below.

Calculate the predetermined overhead allocation rate.(Round your answer to the nearest cent. )

Question

Tungsten,Inc.manufactures both normal and premium tube lights.The company allocates manufacturing overhead using a single plantwide rate with machine hours as the allocation base.Estimated overhead costs for the year are $102,000.Additional estimated information is given below.

Calculate the predetermined overhead allocation rate.(Round your answer to the nearest cent. )

Quizplus · Accepted Answer

B)Total machine hours = 24,000 + 39,000 = 63,000
Predetermined overhead allocation rate = Total estimated overhead costs / Total estimated quantity of the overhead allocation base = $102,000 / 63,000 machine hours = $1.62 per machine hour