Problem
Koehler makes handheld calculators in two models: basic and professional. Koehler estimated $1, 149,500 of manufacturing overhead and 605,000 machine hours for the year. The basic model actually consumed 280,000 machine hours, and the professional model consumed 325,000 machine hours.
Task
• Compute the predetermined overhead allocation rate using machine hours (MHr) as the allocation base.
• How much overhead is allocated to the basic model? To the professional model?
• Compute the predetermined overhead allocation rate using machine hours as the allocation base.
Select the formula, and then enter the amounts to compute the predetermined overhead (OH) allocation rate.