NovaTech Manufacturing estimates that its employees will utilize 150,000 machine hours during the coming year. Total overhead costs are estimated to be $6,000,000, and direct labor hours are estimated to be 90,000 hours. Actual machine hours are 140,000, and actual labor hours are 85,000. If NovaTech allocates overhead based on machine hours, what is the predetermined manufacturing overhead rate?

NovaTech Manufacturing estimates that its employees will utilize 150,000 machine hours during the coming year. Total overhead costs are estimated to be $6,000,000, and direct labor hours are estimated to be 90,000 hours. Actual machine hours are 140,000, and actual labor hours are 85,000. If NovaTech allocates overhead based on machine hours, what is the predetermined manufacturing overhead rate?

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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