Thomlin Company forecasts that total overhead for the current year will be $11,938,000 with 177,000 total machine hours. Year to date, the actual overhead is $7,533,000 and the actual machine hours are 85,000 hours. The predetermined overhead rate based on machine hours is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours. a.$67 per machine hour b.$140 per machine hour c.$43 per machine hour d.$89 per machine hour

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Business

Sonia Gould

5 February, 13:53

Thomlin Company forecasts that total overhead for the current year will be $11,938,000 with 177,000 total machine hours. Year to date, the actual overhead is $7,533,000 and the actual machine hours are 85,000 hours. The predetermined overhead rate based on machine hours is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours. a.$67 per machine hour b.$140 per machine hour c.$43 per machine hour d.$89 per machine hour

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Answers (1)

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Arjun Flores · Answer 1

Correct answer is Option A = $67

Explanation:

In order to find out the predetermined overhead rate, forecasted overhead for the current year will be taken into account alongwith total machine hours of that has been forecasted for the current year.

Formula for calculation

Predetermined overhead rate = Forecasted Overhead for the year / Total Machine hours

Forecasted Overhead for the year = $11938000

Total Machine hours = 177000

Predetermined overhead rate = 11938000/177000 = $67 (Rounded off)