Kisler Incorporated makes a single product-a cooling coil used in commercial refrigerators. 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) $4.67 per machine-hour
B) $6.96 per machine-hour
C) $6.67 per machine-hour
D) $9.95 per machine-hour

Question

Kisler Incorporated makes a single product-a cooling coil used in commercial refrigerators. 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) $4.67 per machine-hour 
B) $6.96 per machine-hour 
C) $6.67 per machine-hour 
D) $9.95 per machine-hour

Quizplus · Accepted Answer

Predetermined overhead rate = $70,035/10,500 machine-hours = $6.67 per machine-hour

Kisler Incorporated Makes a Single Product-A Cooling Coil Used in Commercial