Strong company applies overhead based on machine hours. at the beginning of 20x1, the company estimated that manufacturing overhead would be $500,000, and machine hours would total 20,000. by 20x1 year-end, actual overhead totaled $525,000, and actual machine hours were 25,000. on the basis of this information, the 20x1 predetermined overhead rate was:

Question

Jonathan Henry

Business

7 November, 13:24

Strong company applies overhead based on machine hours. at the beginning of 20x1, the company estimated that manufacturing overhead would be $500,000, and machine hours would total 20,000. by 20x1 year-end, actual overhead totaled $525,000, and actual machine hours were 25,000. on the basis of this information, the 20x1 predetermined overhead rate was:

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Answers (1)

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Gianna · Answer 1

Hi there

predetermined overhead rate =

estimated manufacturing overhead:

estimated machine hours

So

predetermined overhead rate =

500,000:20,000=25 per machine hour

Good luck!