Zercox Corporation uses a predetermined rate to apply overhead. At the beginning of the year, Zercox estimated its overhead costs at $380,000, direct labor hours at 55,000, and machine hours at 25,000. Actual overhead costs incurred were $350,150, actual direct labor hours were 56,000, and actual machine hours were 26,000. What is Zercox's predetermined overhead rate per machine hour? (Round the answer to two decimal places) a. $6.79 b. $14.62 c. $14.00 d. $15.20

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Answer:

The correct answer is option d.

Explanation:

The estimated overhead cost is $380,000.

The estimated direct labor hours are 55,000.

The estimated machine hours is 25,000.

The actual overhead cost incurred is $350,150.

The actual labor hour is 56,000.

The actual machine hours is 26,000.

The predetermined or estimated overhead rate per machine hour

= [tex]\frac{estimated\ overhead\ cost}{estimated\ machine\ hour}[/tex]

= [tex]\frac{380,000}{25,000}[/tex]

= $15.2

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