At Westonci.ca, we make it easy for you to get the answers you need from a community of knowledgeable individuals. Get detailed and accurate answers to your questions from a community of experts on our comprehensive Q&A platform. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.

The following data relates to Black-Out Company's estimated amounts for next year. Estimated: Department 1 Department 2 Manufacturing overhead costs $ 300,000 $ 400,000 Direct labor hours 60,000 DLH 80,000 DLH Machine hours 1,000 MH 2,000 MH What is the company's plantwide overhead rate if machine hours are the allocation base

Sagot :

Answer:

Predetermined manufacturing overhead rate= $233.33 per machine hour

Explanation:

Giving the following information:

Total estimated overhead= 300,000 + 400,000= $700,000

Machine hours= 1,000 + 2,000= 3,000

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

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

Predetermined manufacturing overhead rate= 700,000 / 3,000

Predetermined manufacturing overhead rate= $233.33 per machine hour