A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as 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) $20.93 per MH
B) $19.86 per MH
C) $19.50 per MH
D) $20.55 per MH

Question

A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as 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) $20.93 per MH 
B) $19.86 per MH 
C) $19.50 per MH 
D) $20.55 per MH

Quizplus · Accepted Answer

Variable overhead + Fixed overhead = $28,490 + $47,545
Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $76,035 ÷ 3,700 MHs = $20.55 per MH

A Manufacturing Company Has a Standard Costing System Based on Standard