For 2018, XYZ Co. uses machine-hours as the only overhead cost-allocation base. The direct cost rate is $8.00 per unit. The selling price of the product is $25.00. The estimated manufacturing overhead costs are $320,000 and estimated 50,000 machine hours. The actual manufacturing overhead costs are $360,000 and actual machine hours are 55,000. Using job costing, the 2018 actual (not predetermined) overhead cost rate is ________.

Respuesta :

The 2018 actual overhead cost rate is $6.55

Compute the actual overhead cost rate for 2018?

Note that the requirement is to determine the actual overhead cost rate per machine hour in the year 2018, which considers the actual manufacturing overhead incurred and the actual machine hours used.

In essence, the actual overhead cost rate is the actual manufacturing overhead cost divided by the actual machine hours

actual overhead cost rate=$360,000/55,000

actual overhead cost rate=$6.55

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