Ridley Company estimates that overhead costs for the next year will be $6,870,000 for indirect labor and $450,000 for factory utilities.The company uses machine hours as its overhead allocation base.If 160,000 machine hours are planned for this next year,what is the company's plantwide overhead rate?
A) $.02186 per machine hour.
B) $42.9375 per machine hour.
C) $45.75 per machine hour.
D) $2.8125 per machine hour.
E) $.3555 per machine hour.

Question

Quizplus · Accepted Answer

($6,870,000 + $450,000)/160,000 machine hours = $45.75 per machine hour

Ridley Company Estimates That Overhead Costs for the Next Year