Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year: Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be:
A) $6.80 per machine-hour
B) $6.00 per machine-hour
C) $3.00 per machine-hour
D) $3.40 per machine-hour

Question

Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year:  Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be:
A) $6.80 per machine-hour 
B) $6.00 per machine-hour 
C) $3.00 per machine-hour 
D) $3.40 per machine-hour

Quizplus · Accepted Answer

The Answer of Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year:  Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be:
A) $6.80 per machine-hour 
B) $6.00 per machine-hour 
C) $3.00 per machine-hour 
D) $3.40 per machine-hour

Reamer Corporation Uses a Predetermined Overhead Rate Based on Machine-Hours