The Anderson Company forecasts that total overhead for the current year will be $15,000,000 and total machine hours will be 200,000 hours. However, the actual overhead is $8,000,000 and the actual machine hours are 100,000 hours. If the company uses a predetermined overhead rate based on machine hours for applying overhead, what is predetermined overhead rate? Select one: a. $80 per machine hour b. $150 per machine hour c. $75 per machine hour d. $40 per machine hour

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 7EB: A company estimates its manufacturing overhead will be $840,000 for the next year. What is the...
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The Anderson Company forecasts that total overhead for the current year will be
$15,000,000 and total machine hours will be 200,000 hours. However, the actual
overhead is $8,000,000 and the actual machine hours are 100,000 hours. If the
company uses a predetermined overhead rate based on machine hours for
applying overhead, what is predetermined overhead rate?
Select one:
a. $80 per machine hour
b. $150 per machine hour
c. $75 per machine hour
d. $40 per machine hour
Transcribed Image Text:The Anderson Company forecasts that total overhead for the current year will be $15,000,000 and total machine hours will be 200,000 hours. However, the actual overhead is $8,000,000 and the actual machine hours are 100,000 hours. If the company uses a predetermined overhead rate based on machine hours for applying overhead, what is predetermined overhead rate? Select one: a. $80 per machine hour b. $150 per machine hour c. $75 per machine hour d. $40 per machine hour
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