Question

Thomlin Company forecasts that total overhead for the current year will be $11,533,000 with 162,000 total machine hours. Year to date, the actual overhead is $7,740,000 and the actual machine hours are 99,000 hours.

The predetermined overhead rate based on machine hours is _____.

Answer 1

71.19 per machine hour

Step-by-step explanation:

Data provided as per the question is below:-

Total overhead = $11,533,000

Total machine hours = 162,000

The computation of overhead rate is shown below:-

Overhead rate = Total overhead ÷ Total machine hours

= $11,533,000 ÷ 162,000

= 71.19 per machine hour

Therefore, for computing the overhead rate we simply divide the total machine hour by total overhead.