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Jin Zeang Burgess
on Oct 10, 2024

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Recht Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $9.30 per machine-hour and fixed manufacturing overhead cost of $17,940 per period.If the denominator level of activity is 1,200 machine-hours, the fixed element in the predetermined overhead rate would be:

A) $14.95
B) $930.00
C) $24.25
D) $9.30

Predetermined Overhead Rate

An estimated rate used to allocate overhead costs to products or job orders, based on expected costs and activity levels.

Variable Manufacturing Overhead

Costs that fluctuate with the level of production, such as utilities or indirect materials, but are still related to the manufacturing process.

Machine-Hour

A unit of measure representing an hour of operation of a machine, used in calculating manufacturing costs and overhead rates.

  • Distinguish between the fixed and variable components of the predetermined overhead rate
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Eesha NasirOct 12, 2024
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