Moonrays,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 $106,000.Additional estimated information is given below.

Calculate the predetermined overhead allocation rate.(Round your answer to the nearest cent. )
A)$5.05 per direct labor hour
B)$1.80 per machine hour
C)$2.79 per machine hour
D)$0.19 per direct labor hour

Question

Moonrays,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 $106,000.Additional estimated information is given below.

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

Calculate the predetermined overhead allocation rate.(Round your answer to the nearest cent. )
A)$5.05 per direct labor hour 
B)$1.80 per machine hour 
C)$2.79 per machine hour 
D)$0.19 per direct labor hour

Quizplus · Accepted Answer

B)Total machine hours = 21,000 + 38,000 = 59,000
Predetermined overhead allocation rate = Total estimated overhead costs / Total estimated quantity of the overhead allocation base = $106,000 / 59,000 machine hours = $1.80 per machine hour