(Appendix 10A) 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

(Appendix 10A) 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

(Appendix 10A) Kisler Incorporated Makes a Single Product--A Cooling Coil