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30 July, 05:18

Aksamit 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 62,000 estimated variable manufacturing overhead $7.03 per machine-hour estimated total fixed manufacturing overhead $1,486,140 actual machine-hours for the year 61,100 the predetermined overhead rate for the recently completed year was closest to:

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  1. 30 July, 05:26
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    The predetermined overhead rate can be obtained by calculating the total cost (variable cost + fixed cost) then dividing it to the amount of work hours. This is calculated based on the estimated machine hours.

    Total cost = $7.03 * 62,000 + $1,486,140

    Total cost = $1,922,000

    The predetermined overhead rate is therefore:

    Predetermined overhead rate = $1,922,000 / 62,000 hours

    Predetermined overhead rate = $31 / hr
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