Mason Industries computes its plantwide predetermined overhead rate annually on the basis of machine hours. At the beginning of the year, it was estimated that 40,000 machine hours would be required for the period's estimated level of production. The company also estimated $720,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4 per machine hour. Mason's actual manufacturing overhead cost for the year was $960,000, and its actual total machine hours were 41,500. Compute the company's plantwide predetermined overhead rate for the year.

Mason Industries computes its plantwide predetermined overhead rate annually on the basis of machine hours. At the beginning of the year, it was estimated that 40,000 machine hours would be required for the period's estimated level of production. The company also estimated $720,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4 per machine hour. Mason's actual manufacturing overhead cost for the year was $960,000, and its actual total machine hours were 41,500. Compute the company's plantwide predetermined overhead rate for the year.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 23Q: If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of...

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