The following information is provided for the year:
$\begin{array}{llr}
\text { Actual overhead } &\$450,000\
\text {Actual machine hours worked } &25,000\
\text { Budgeted machine hours} &27,500\
\text {Applied overhead } &\$487,500
\end{array}$
If normal costing is used,what would be the budgeted overhead used to calculate the predetermined rate?
A)$443,250
B)$450,000
C)$487,500
D)$536,250

Question

The following information is provided for the year: 
$\begin{array}{llr}
  \text { Actual overhead } &\$450,000\
 \text {Actual machine hours worked  } &25,000\
\text { Budgeted machine hours} &27,500\
 \text {Applied overhead } &\$487,500
\end{array}$
 If normal costing is used,what would be the budgeted overhead used to calculate the predetermined rate?
A)$443,250
B)$450,000
C)$487,500
D)$536,250

Quizplus · Accepted Answer

The predetermined overhead rate is calculated using budgeted overhead and budgeted machine hours. The applied overhead is given as $487,500 for 27,500 budgeted machine hours, so the budgeted overhead is $487,500.

The Following Information Is Provided for the Year If Normal Costing Is Used,what Would Be the Budgeted Overhead