Buker Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year.Data for the upcoming year appear below: The predetermined overhead rate for the recently completed year was closest to:
A)$22.04
B)$29.59
C)$7.67
D)$29.71

Question

Buker Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year.Data for the upcoming year appear below:  The predetermined overhead rate for the recently completed year was closest to:
A)$22.04 
B)$29.59 
C)$7.67 
D)$29.71

Quizplus · Accepted Answer

Estimated total manufacturing overhead = $1,630,960 + ($7.67 per machine-hour × 74,000 machine-hours)= $2,198,540
Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $2,198,540 ÷ 74,000 machine-hours = $29.71 per machine-hour

Buker Corporation Bases Its Predetermined Overhead Rate on the Estimated