Question

The Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. The predetermined overhead rate based on machine hours is a.$45 per machine hour b.$48 per machine hour c.$50 per machine hour d.$62 per machine hour

Answer 1

Answer:

The correct answer is D.

Explanation:

Giving the following information:

The Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours.

To calculate the predetermined overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 15,500,000/250,000= $62 per machine hour.