Morisey Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $8.60 per machine-hour and fixed manufacturing overhead cost of $457,002 per period.If the denominator level of activity is 6,300 machine-hours,the predetermined overhead rate would be:
A)$81.14
B)$860.00
C)$72.54
D)$8.60

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
= $457,002 F1F1F1S1F1F1F10 6,300 machine-hours = $72.54 per machine-hour
Predetermined overhead rate = $8.60 per machine-hour + $72.54 per machine-hour = $81.14 per machine-hour

Morisey Corporation Bases Its Predetermined Overhead Rate on Variable Manufacturing