Odonell Corporation estimates that its variable manufacturing overhead is $11.20 per machine-hour and its fixed manufacturing overhead is $563,640 per period.
-If the denominator level of activity is 6,000 machine-hours, the fixed component in the predetermined overhead rate would be:
A)$1,120.00 per machine-hour
B)$11.20 per machine-hour
C)$93.94 per machine-hour
D)$105.14 per machine-hour

Question

Quizplus · Accepted Answer

The fixed component in the predetermined overhead rate is calculated by dividing the total fixed manufacturing overhead by the denominator level of activity: $563,640 / 6,000 machine-hours = $93.94 per machine-hour.

Odonell Corporation Estimates That Its Variable Manufacturing Overhead Is $11