Bolander Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following dа ta:

Total machine-hours 70,000

Total fixed manufacturing overhead cost $294,000

Variable manufacturing overhead per machine-hour $2.30

Recently, Job M825 was completed with the following characteristics:

Number of units in the job 20

Total machine-hours 80

Direct materials $665

Direct labor cost $1,840

The predetermined overhead rate is closest to:

a. $8.80 per machine-hour

b. $6.50 per machine-hour

c. $2.30 per machine-hour

d. $4.20 per machine-hour

Question

Gemma Collins

Business

6 April, 18:16

Bolander Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following dа ta:

Total machine-hours 70,000

Total fixed manufacturing overhead cost $294,000

Variable manufacturing overhead per machine-hour $2.30

Recently, Job M825 was completed with the following characteristics:

Number of units in the job 20

Total machine-hours 80

Direct materials $665

Direct labor cost $1,840

The predetermined overhead rate is closest to:

a. $8.80 per machine-hour

b. $6.50 per machine-hour

c. $2.30 per machine-hour

d. $4.20 per machine-hour

+2

Answers (1)

Know the Answer?

Holly Bell · Answer 1

b. $6.50 per machine-hour

Explanation:

The computation of the predetermined overhead rate is

= Total fixed manufacturing overhead cost : Total machine-hours + Variable manufacturing overhead per machine-hour

= $294,000 : 70,000 + $2.30

= $4.20 + $2.30

= $6.50 per machine-hour

Therefore, all the other information that is given are irrelevant. Hence, ignored it