Question

0) Pembroke Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the follow for the most recent year (4 pts). Estimated total fixed manufacturing overhead from the beginning of the year Estimated activity level from the beginning of the year Actual total fixed manufacturing overhead Actual activity level $ 534,000 30,000machine-hours $ 487,000 27,400machine-hours The predetermined overhead rate per machine-hour would be closest to: A) $17.80 B) $19.49 C) $17.77 D) $16.23 7) Giannitti Corporation bases its predetermined overhead rate on the estimated machine- hours for the upcoming year. Data for the upcoming year appear below (4 pts): Estimated machine-hours Estimated variable manufacturing overhead Estimated total fixed manufacturing overhead 36,000 $ 3.01 per machine-hour $ 1,058,040 The predetermined overhead rate for the recently completed year was closest to: A) $3.01 per machine-hour B) $29.39 per machine-hour C) $32.81 per machine-hour D) $32.40 per machine-hour

Answer 1

6) Predetermined overhead rate = Estimated Total manufacturing overhead / Estimated Machine hours

Predetermined overhead rate = $534,000 / 30,000 Machine hours

Predetermined overhead rate = $17.80

Option 'A' is correct

7)

Estimated variable manufacturing overhead = (36,000 * 3.01) = $108,360

Estimated Fixed manufacturing overhead = $1,058,040

Estimated total Manufacturing overhead = $1,166,400

Predetermined overhead rate = $1,166,400 / 36,000

Predetermined overhead rate = $32.40

Predetermined overhead rate = $32.40 per machine hour