Baj Corporation uses a predetermined overhead rate base on machine-hours that it

Question

Baj Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 534,000 Estimated activity level from the beginning of the year 30,000machine-hours Actual total fixed manufacturing overhead $ 487,000 Actual activity level 27,400machine-hours The predetermined overhead rate per machine-hour would be closest to: A) $17.80 B) $19.49 C) $16.23 D) $17.77

Explanation / Answer

Answer is A. $ 17.80 Explanation: Pre-determined OH rate: Estimated overheads for the period 534000 Divide: estimated activity 30000 MH Pre-determined OH rate: 17.8 per MH

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