Problem:
Simoneaux Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the machine-hours for the upcoming year at 20,500 machine-hours.
Required:
The estimated variable manufacturing overhead was $5.70 per machine-hour and the estimated total fixed manufacturing overhead was $467,400. The predetermined overhead rate for the recently completed year was closest to:
- $22.80 per machine-hour
- $5.70 per machine-hour
- $28.42 per machine-hour
- $28.50 per machine-hour
Note: Please show the work not just the answer.