Muscato Corporation estimates that its variable manufacturing overhead is $19.00 per machine-hour and its fixed manufacturing overhead is $1,442,100 per period. If the denominator level of activity is 7,500 machine-hours, the fixed component in the predetermined overhead rate would be:
A) $192.28 per machine-hour
B) $211.28 per machine-hour
C) $19.00 per machine-hour
D) $1,900.00 per machine-hour

Question

Quizplus · Accepted Answer

Fixed component of the predetermined overhead rate = Estimated fixed overhead ÷ Denominator level of activity = $1,442,100 ÷ 7,500 machine-hours = $192.28 per machine-hour

Muscato Corporation Estimates That Its Variable Manufacturing Overhead Is $19