Chewy Dog Toys bases its predetermined overhead rate on the estimated machine-ho

Question

Chewy Dog Toys bases its predetermined overhead rate on the estimated machine-hours for the unsoming year. Data for the most recently completed year appear below 16. Estimates made at the beginning of the years 19,000 Estimated variable manufacturing overhead Estimated total fixed manufacturing overhead. $465,880 S7.89 per machine-hour Actual machine-hours for the year.... 20,200 The predetermined overhead rate for the recently completed year was closest to A. $7.89 B. S32.41 C. $24.52 D. $30.95 E. none of the above.

Explanation / Answer

Total overheads=(7.89*19000)+465880=$615790

Predetermined overhead rate=Estimated overheads/Estimated machine hours

=(615790/19000)=$32.41(B)

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