Corporation manufactures computers. Assume that Mell: •allocates manufacturing overhead based on machine hours•estimated13,000machine hours and$93,000of manufacturing overhead costs•actually used14,000machine hours and incurred the following actual costs: Indirect labor$14,000Depreciation on plant44,000Machinery repair13,000Direct labor77,000Plant supplies7,000Plant utilities7,000Advertising33,000Sales commissions22,000 What is Mell's predetermined overhead allocation rate? O A. $7.15/ machine hourO B. $6.54/ machine hourOC. $6.07/ machine hourO D. $6.64/ machine hour

Predetermined overhead rate is calculated on the basis of estimated cost and estimated hours,…

Answered: Corporation manufactures computers.…

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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Corporation manufactures computers. Assume that Mell:

•	allocates manufacturing overhead based on machine hours
•	estimated 13,000 machine hours and $93,000 of manufacturing overhead costs
•	actually used 14,000 machine hours and incurred the following actual costs:

Indirect labor	$14,000
Depreciation on plant	44,000
Machinery repair	13,000
Direct labor	77,000
Plant supplies	7,000
Plant utilities	7,000
Advertising	33,000
Sales commissions	22,000

What is Mell's predetermined overhead allocation rate?

O A. $7.15/ machine hour
O B. $6.54/ machine hour
OC. $6.07/ machine hour
O D. $6.64/ machine hour

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