Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $ 157,300 Estimated machine-hours 4,550 Actual manufacturing overhead $ 156,500 Actual machine-hours 4,680 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. The predetermined overhead rate is closest to:

Question

Clayton Mccarthy

Business

24 July, 03:35

Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $ 157,300 Estimated machine-hours 4,550 Actual manufacturing overhead $ 156,500 Actual machine-hours 4,680 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. The predetermined overhead rate is closest to:

+1

Answers (1)

Know the Answer?

Isabela Knox · Answer 1

Estimated manufacturing overhead rate = $34.57 per machine hour.

Explanation:

Giving the following information:

Acheson Corporation applies manufacturing overhead based on machine-hours.

Estimated manufacturing overhead $ 157,300

Estimated machine-hours 4,550

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

Estimated manufacturing overhead rate = 157,300 / 4,550 = $34.57 per machine hour.