Question

ForFoundry in Rochester, New York sa predetermined acting everhead to allocate gehad to indical based on the machine hours ord the beginning of the year the company expected to incur the following Click the icon to view the costs Pead themes Requirement Computers termined manufacturing and rate Determine the fore predetermined overed the call them - Predictined over todo

Answer 1

The figures are not provided in the question here nor the link is provided to access the data.

Hence the following steps need to be applied to compue the Predetermined overhead rate

1. We would need the following data first

Manufacturing overhead costs for last year or estmated overhead costs (We would need to seggregate the applcable manufacturing overheads and exclude any direct costs, selling and adminidtrative overheads)

Estminated Machine Hours (This will be the basis for absorption of overhead costs to compute the predetermined overhead rate)

2. Total the Estimated overhead costs to arrive at the total overheads = A

Estimated Machine Hours = B

Predetermined manufacturing overhead rate = A / B (Answer to your question. Amounts of A can be easily computed with figures given in problem and B would be provided)

3. Computation of overhead costs for each job - Now the overheads to be applied to each job can be easily computed based on the machine hours applied/to be applied to jobs multiplied by the predetermined overhead rate.

This helps for quick computation and cost estmate for each job.