Heersink Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $10.50 per machine-hour and fixed manufacturing overhead cost of $108,108 per period.If the denominator level of activity is 2,700 machine-hours,the fixed element in the predetermined overhead rate would be:
A)$1,050.00
B)$40.04
C)$10.50
D)$50.54

Question

Quizplus · Accepted Answer

Fixed component of predetermined overhead rate = Estimated total fixed manufacturing overhead cost F1F1F1S1F1F1F10 Estimated total amount of the allocation base
= $108,108 F1F1F1S1F1F1F10 2,700 machine-hours = $40.04 per machine-hour

Heersink Corporation Bases Its Predetermined Overhead Rate on Variable Manufacturing