Question

The following data relates to Black-Out Company's estimated amounts for next year. Estimated: Department 1 Department...

The following data relates to Black-Out Company's estimated amounts for next year.

Estimated: Department 1 Department 2
Manufacturing overhead costs $ 380,000 $ 528,000
Direct labor hours 64,000 DLH 84,000 DLH
Machine hours 1,400 MH 2,400 MH


What is the company's plantwide overhead rate if machine hours are the allocation base? (Round your answer to two decimal places.)

Multiple Choice

  • $238.95 per MH

  • $158.33 per MH

  • $105.71 per MH

  • $4.24 per MH

  • $5.94 per MH

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Answer #1

Predetermined Overhead rate = Total estimated overhead/Total machine hours

= (380,000+528,000)/(1400+2400)

= 908,000/3800

= 238.95 per MH

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