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13 February, 14:33

Almaraz Corporation has two manufacturing departments--Forming and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Finishing Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $ 40,600 $ 8,100 $ 48,700 Estimated variable manufacturing overhead cost per MH $ 1.30 $ 2.80 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to: $6.62 $4.87 $4.10 $7.10

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  1. 13 February, 18:20
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    The correct answe is B.

    Explanation:

    Giving the following information:

    Forming Finishing Total

    Estimated total machine-hours (MHs) 7,000 3,000 10,000

    Estimated total fixed manufacturing overhead cost $ 40,600 $ 8,100 $ 48,700

    Estimated variable manufacturing overhead cost per MH $ 1.30 $ 2.80

    To calculate the estimated manufacturing overhead rate for the whole plant we need to use the following formula:

    Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

    Estimated manufacturing overhead rate = (48,700/10,000) = $4.87 per machine-hour
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Home » Business » Almaraz Corporation has two manufacturing departments--Forming and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Finishing Total Estimated total machine-hours (MHs)
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