Asked by Tarja Singh on Apr 25, 2024
Verified
Benoit Corporation's manufacturing overhead includes $14.20 per machine-hour for variable manufacturing overhead and $659,280 per period for fixed manufacturing overhead.Required:
Determine the predetermined overhead rate for the denominator level of activity of 6,700 machine-hours. (Round your answer to 2 decimal places.)
Predetermined Overhead Rate
This is a rate used to allocate manufacturing overhead costs to products or job orders, estimated by dividing total estimated overhead costs by an allocation base, such as direct labor hours or machine hours.
Variable Manufacturing Overhead
Costs that vary with the level of production output but are indirect in nature, such as indirect materials and utilities.
Fixed Manufacturing Overhead
Regular, fixed costs associated with operating a manufacturing facility, including costs like rent, depreciation, and property taxes.
- Dissect the components that constitute a predetermined overhead rate and its computational method.
Verified Answer
= [(${{[a(1)]:#,##0.00}} per machine-hour × {{[a(3)]:#,###}} machine-hours) + ${{[a(2)]:#,###}}] ÷ {{[a(3)]:#,###}} machine-hours
= ${{[a(4)]:#,###}} ÷ {{[a(3)]:#,###}} machine-hours
= ${{[a(5)]:#,##0.00}} per machine-hour
Learning Objectives
- Dissect the components that constitute a predetermined overhead rate and its computational method.
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