Question

Brothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated machine-hours 38,900 Estimated variable manufacturing overhead $ 5.98 per machine-hour Estimated total fixed manufacturing overhead $ 1,051,078 Actual machine-hours for the year 35,900 The predetermined overhead rate for the recently completed year was closest to:

Answer 1

Answer:

The predetermined overhead rate for the recently completed year was closest to $33

Explanation:

The computation of the predetermined overhead rate is shown below:

= predetermined fixed overhead rate + predetermined variable overhead rate

where,

Predetermined fixed overhead rate = (Fixed overhead cost ÷ estimated direct labor)

= $1,051,078 ÷ 38,900 direct labor

= $27.02

And, the predetermined variable overhead rate is $5.98

Now put these values to the above formula  

So, the value would equal to

= $27.02 + $5.98

= $33