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Harootunian Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $ 312,000 Variable manufacturing overhead per machine-hour $ 2.10 Recently, Job T629 was completed with the following characteristics: Number of units in the job 50 Total machine-hours 200 The predetermined overhead rate is closest to:

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Answer:

The following multiple choices are missing:

$8.10 per machine-hour

$2.10 per machine-hour

$3.90 per machine-hour

$6.00 per machine-hour

The predetermined overhead rate is $6

Explanation:

The predetermined overhead rate is the sum of the fixed manufacturing overhead cost per machine hour and variable manufacturing overhead per machine hour

fixed manufacturing overhead cost per machine=total fixed manufacturing overhead/total machine hours

fixed manufacturing overhead=$312,000

total machine hours is 80,000 hours

fixed manufacturing overhead cost per machine=$312,000/80,000=$3.9

variable manufacturing overhead per machine hour is $2.10

Predetermined overhead rate =$3.9+$2.1=$6

The last option is the correct one

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