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Cindy Inc. estimates that its employees will utilize 125,000 machine hours during the coming year. Total overhead costs are estimated to be $4,500,000 and direct labor hours are estimated to be 100,000. Actual machine hours are 120,000. Actual labor hours are 75,000. If Cindy Inc. allocates overhead based on machine hours, what is the predetermined manufacturing overhead rate?

Cindy Inc. estimates that its employees will utilize 125,000 machine hours during the coming year. Total overhead costs are estimated to be $4,500,000 and direct labor hours are estimated to be 100,000. Actual machine hours are 120,000. Actual labor hours are 75,000. If Cindy Inc. allocates overhead based on machine hours, what is the predetermined manufacturing overhead rate?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cindy Inc. estimates that its employees will utilize 125,000 machine hours during the coming year. Total overhead costs are estimated to be $4,500,000 and direct labor hours are estimated to be 100,000. Actual machine hours are 120,000. Actual labor hours are 75,000. If Cindy Inc. allocates overhead based on machine hours, what is the predetermined manufacturing overhead rate?
Transcribed Image Text:Cindy Inc. estimates that its employees will utilize 125,000 machine hours during the coming year. Total overhead costs are estimated to be $4,500,000 and direct labor hours are estimated to be 100,000. Actual machine hours are 120,000. Actual labor hours are 75,000. If Cindy Inc. allocates overhead based on machine hours, what is the predetermined manufacturing overhead rate?
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