Avatar corporation uses a predetermined rate to apply overhead. at the beginning of the year, avatar estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000. actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000. what is the predetermined overhead rate per machine hour for avatar?

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Business

Aedan

17 October, 15:13

Avatar corporation uses a predetermined rate to apply overhead. at the beginning of the year, avatar estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000. actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000. what is the predetermined overhead rate per machine hour for avatar?

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Thomas · Answer 1

Hi there

predetermined rate=estimated overhead cost:estimated machine hours

So

predetermined rate=240000:10000

predetermined rate=24 per machine hour

Good luck!