Ask Question
7 October, 23:52

Precision Company estimates its machine-hour requirements for the four quarters to be 35,000 hours, 20,000 hours, 15,000 hours, and 30,000 hours respectively. The variable manufacturing overhead rate is $4 per machine-hour. The fixed manufacturing overhead is $50,000 per quarter, which includes $20,000 of depreciation expense.

A. What is the budgeted variable manufacturing overhead for the year?

$200,000

$260,000

$280,000

$400,000

B. What is the predetermined overhead rate for the year?

+4
Answers (1)
  1. 8 October, 00:01
    0
    A. $400,000

    B. $6 per machine hour

    Explanation:

    A. The computation of budgeted variable manufacturing overhead is shown below:-

    Budgeted variable overhead cost = Four quarters * Variable manufacturing overhead rate

    = (35,000 + 20,000 + 15,000 + 30,000) * $4

    = 100,000 * $4

    = $400,000

    B. The computation of predetermined overhead rate is shown below:-

    Predetermined rate = Variable manufacturing overhead rate + Fixed manufacturing overhead) : Total machine hours

    = $400,000 + ($50,000 * $4) : 100,000

    = $6 per machine hour
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Precision Company estimates its machine-hour requirements for the four quarters to be 35,000 hours, 20,000 hours, 15,000 hours, and 30,000 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers