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Moore Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below:

Estimates made at the beginning of the year:
Estimated machine-hours 19,000
Estimated variable manufacturing overhead $ 7.89 per machine-hour
Estimated total fixed manufacturing overhead $ 465,880
Actual machine-hours for the year 20,200

The predetermined overhead rate for the recently completed year was closest to ____.

Respuesta :

Answer:

$32.41

Explanation:

Given that,

Estimated machine-hours = 19,000

Estimated variable manufacturing overhead = $ 7.89 per machine-hour

Estimated total fixed manufacturing overhead = $ 465,880

Actual machine-hours for the year = 20,200

Predetermined overhead rate is defined as the sum total of estimated variable manufacturing overhead per machine hour and estimated total fixed manufacturing overhead per machine hour.

Firstly, we need to find out the Estimated total fixed manufacturing overhead per machine hour:

= Estimated total fixed manufacturing overhead ÷ Estimated machine-hours

= $ 465,880  ÷ 19,000

= $24.52 per machine hour

Therefore, the predetermined overhead rate is as follows:

= Estimated variable manufacturing overhead + Estimated total fixed manufacturing overhead

= $7.89 per machine hour  + $24.52 per machine hour

= $32.41

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