Felton Quality Productions uses a predetermined overhead allocation rate based on machine hours.It has provided the following information for the year: $$\begin{array} { | l | r | }
\hline \text { Actual manufacturing overhead costs incurred } & \$ 100,000 \
\hline \text { Manufacturing overhead costs allocated to production } & \$ 46,000 \
\hline \text { Actual direct materials cost } & \$ 230,000 \
\hline \text { Actual direct labor cost } & \$ 50,000 \
\hline \text { Actual machine hours } & 32,000 \text { hours } \
\hline
\end{array}$$
Based on the above information,calculate the predetermined overhead allocation rate applied by Felton Quality.(Round your answer to the nearest cent.)

Question

Felton Quality Productions uses a predetermined overhead allocation rate based on machine hours.It has provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Actual manufacturing overhead costs incurred } & \$ 100,000 \
\hline \text { Manufacturing overhead costs allocated to production } & \$ 46,000 \
\hline \text { Actual direct materials cost } & \$ 230,000 \
\hline \text { Actual direct labor cost } & \$ 50,000 \
\hline \text { Actual machine hours } & 32,000 \text { hours } \
\hline
\end{array}$$ 
Based on the above information,calculate the predetermined overhead allocation rate applied by Felton Quality.(Round your answer to the nearest cent.)

Quizplus · Accepted Answer

The predetermined overhead allocation rate is calculated by dividing the estimated manufacturing overhead costs by the estimated machine hours. In this case, the estimated manufacturing overhead costs are $100,000 and the estimated machine hours are 32,000 hours. Therefore, the predetermined overhead allocation rate is $100,000 / 32,000 hours = $3.13 per machine hour.

Felton Quality Productions Uses a Predetermined Overhead Allocation Rate Based