Baj Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 534,000 Estimated activity level from the beginning of the year 30,000 machine-hours Actual total fixed manufacturing overhead $ 487,000 Actual activity level 27,400 machine-hours The predetermined overhead rate per machine-hour would be closest to

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Business

Maren Raymond

4 March, 12:12

Baj Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 534,000 Estimated activity level from the beginning of the year 30,000 machine-hours Actual total fixed manufacturing overhead $ 487,000 Actual activity level 27,400 machine-hours The predetermined overhead rate per machine-hour would be closest to

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Brenton · Answer 1

Estimated manufacturing overhead rate = $17.8 per direct machine hour

Explanation:

Giving the following information:

Baj Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year.

Estimated total fixed manufacturing overhead from the beginning of the year $ 534,000 Estimated activity level from the beginning of the year 30,000 machine-hours

Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base=

Estimated manufacturing overhead rate = 534000/30000 = $17.8 per direct machine hour