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Brothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data...

Brothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated machine-hours 39,700 Estimated variable manufacturing overhead $ 6.32 per machine-hour Estimated total fixed manufacturing overhead $ 1,159,637 Actual machine-hours for the year 37,500 The predetermined overhead rate for the recently completed year was closest to:

A. 35.18

B. 35.53

C. 6.32

D. 29.21

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Answer #1

Answer is B. 35.53

Explanation :

Predetermined overhead rate =

Estimated manufacturing overhead cost / Estimated machine hours allocated

Estimated manufacturing overhead cost = (39700*6.32)+1159637 = 250904 + 1159637 = $1410541

Estimated machine hours = 39700

Predetermined overhead rate = $1410541 / 39700 = 35.53

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