Aksamit Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: The predetermined overhead rate for the recently completed year was closest to:
A)$23.97
B)$31.00
C)$7.03
D)$31.35

Question

Aksamit Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below:  The predetermined overhead rate for the recently completed year was closest to:
A)$23.97 
B)$31.00 
C)$7.03 
D)$31.35

Quizplus · Accepted Answer

To calculate the predetermined overhead rate, we need to divide the estimated total manufacturing overhead cost by estimated machine-hours. From the table given, we have:
- Estimated total manufacturing overhead cost: $200,000 + $20,400 + $61,800 = $282,200
- Estimated machine-hours: 7,000

So, the predetermined overhead rate = Estimated total manufacturing overhead cost / Estimated machine-hours
= $282,200 / 7,000
= $40.31

Therefore, the predetermined overhead rate for the recently completed year was closest to $40.31, which is closest to option B - $31.00.

Aksamit Corporation Bases Its Predetermined Overhead Rate on the Estimated