Kiker Incorporated makes a single product-an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The predetermined overhead rate is closest to:
A) $9.57 per machine-hour
B) $12.11 per machine-hour
C) $7.57 per machine-hour
D) $15.32 per machine-hour

Question

Kiker Incorporated makes a single product-an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below:  The predetermined overhead rate is closest to:
A) $9.57 per machine-hour 
B) $12.11 per machine-hour 
C) $7.57 per machine-hour 
D) $15.32 per machine-hour

Quizplus · Accepted Answer

Predetermined overhead rate = $423,920/56,000 machine-hours = $7.57 per machine-hour

Kiker Incorporated Makes a Single Product-An Electrical Motor Used in Many