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?

Answer 1

overhead rate = $62 per machine hour

Explanation:

given data

total overhead = $15,500,000

total machine hours = 250,000

actual overhead = $16,000,000

actual machine hours = 330,000 hours

to find out

overhead rate based on machine hours is

solution

we find here Predetermined overhead rate that is calculate as

overhead rate =
`(estimate overhead)/(estimate machine hour)`

put here value

overhead rate =
`(15500000)/(250000)`

overhead rate = $62 per machine hour