A manufacturing company uses a standard costing system in which standard machine-hours (MHs)is the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: The predetermined overhead rate per MH is closest to:
A)$17.91 per MH
B)$18.59 per MH
C)$18.00 per MH
D)$18.50 per MH

Question

A manufacturing company uses a standard costing system in which standard machine-hours (MHs)is the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below:  The following data pertain to operations for the most recent period:  The predetermined overhead rate per MH is closest to:
A)$17.91 per MH 
B)$18.59 per MH 
C)$18.00 per MH 
D)$18.50 per MH

Quizplus · Accepted Answer

Variable overhead + Fixed overhead = $35,075+ $77,775
Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $112,850 ÷ 6,100 MHs = $18.50 per MH

A Manufacturing Company Uses a Standard Costing System in Which