Asked by Patrick Garland on Jun 19, 2024
Verified
The predetermined overhead rate is closest to:
A) $34.06
B) $34.90
C) $34.67
D) $35.52
Predetermined Overhead Rate
An estimated charge per unit of activity used to allocate manufacturing overhead costs to products, calculated before the accounting period begins based on expected costs and activity levels.
- Understand the role of the predetermined overhead rate in costing and decision-making processes.
Verified Answer
TM
Taylor McFarlandJun 23, 2024
Final Answer :
B
Explanation :
Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base
= $157,050 ÷ 4,500 machine-hours
= $34.90 per machine-hour
= $157,050 ÷ 4,500 machine-hours
= $34.90 per machine-hour
Learning Objectives
- Understand the role of the predetermined overhead rate in costing and decision-making processes.
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