Brothern Corporation bases its predetermined overhead rate on the estimated mach

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 Estimated variable manufacturing overhead Estimated total fixed manufacturing overhead 39, 700 6.32 pe $1, 159, 637 37, 500 Actual machine-hours for the year The predetermined overhead rate for the recently completed year was closest to: Multiple Choice $6.32 per machine-hour $29.21 per machine-hour $35.53 per machine-hour $35.18 per machine-hour

Explanation / Answer

Calculate predetermine overhead rate :

Fixed predetermine overhead rate = Estimated fixed manufacturing overhead/Estimated machine hour

= 1159637/39700

Fixed predetermine overhead rate = 29.21 per machine hour

Total predetermine overhead rate = (29.21+6.32) = 35.53 per machine hour

so answer is c) 35.53 per machine hour

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