Answered

Looking for answers? Westonci.ca is your go-to Q&A platform, offering quick, trustworthy responses from a community of experts. Join our platform to connect with experts ready to provide accurate answers to your questions in various fields. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.

Aaron Company estimates direct labor costs and manufacturing overhead costs for the coming year to be $800,000 and $500,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 16,000 hours and 10,000 hours, respectively. What is the predetermined overhead allocation rate?

a. $0.00 per machine hour
b. $81.25 per labor hour
c. $50.00 per machine hour
d. $51.25 per labor hour


Sagot :

abiolataiwo2015

Answer:

c. $50.00 per machine hour

Explanation:

Calculation to determine the predetermined overhead allocation rate

Using this formula

Predetermined overhead allocation rate=Manufacturing overhead costs/Machine hours

Let plug in the formula

Predetermined overhead allocation rate=$500,000/10,000

Predetermined overhead allocation rate=$50.00 per machine hour

Therefore Predetermined overhead allocation rate is $50.00 per machine hour

We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.