The Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. The predetermined overhead rate based on machine hours is. a. a. $48 per machine hour. b. $62 per machine hour. c. $45 per machine hour. d. $50 per machine hour.

Question

Carly Branch

Business

1 September, 09:25

The Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. The predetermined overhead rate based on machine hours is. a. a. $48 per machine hour. b. $62 per machine hour. c. $45 per machine hour. d. $50 per machine hour.

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Answers (1)

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Gauge Acosta · Answer 1

B) $62 per machine hour

Explanation:

To calculate the overhead rate per hour we solve the following equation:

overhead rate per hour = $15,500,000 / 250,000 machine hours = $62 per machine hour

if we compare this current rate per machine hour to last year's rate per machine = $16,000,000 / 300,000 machine hours = $53.33, we can determine that Thomlin is overapplying overhead expenses ($62 > $53.33).