Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 72,900 Estimated variable manufacturing overhead$3.50per machine-hourEstimated total fixed manufacturing overhead$838,710 The predetermined overhead rate for the recently completed year was closest to: Multiple ChoiceA. $6.66 per machine-hourB. $10.50 per machine-hourC. $8.69 per machine-hourD. $15.00 per machine-hour

Answered: Giannitti Corporation bases its…

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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Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below:


Estimated machine-hours		72,900
Estimated variable manufacturing overhead	$	3.50	per machine-hour
Estimated total fixed manufacturing overhead	$	838,710

The predetermined overhead rate for the recently completed year was closest to:

Multiple Choice

A. $6.66 per machine-hour

B. $10.50 per machine-hour

C. $8.69 per machine-hour

D. $15.00 per machine-hour

Expert Solution

Step 1 Introduction

The predetermined overhead rate is calculated as estimated total manufacturing overhead cost divided by base activity.

This predetermined overhead rate is further used to compute the actual expenses on the production.

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