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    Predetermined overhead rate

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    Question 15: (2 points)
    Recht Corporation's summary flexible budget for two levels of activity appears below:

    Cost Formula (per machine-hour) Activity
    (in machine-hours)
    1,190 1,290
    Total variable overhead cost $9.2 $ 10,948 $ 11,868
    Total fixed overhead cost 18,088 18,088
    Total overhead cost $29,036 $29,956

    If the denominator level of activity is 1,190 machine-hours, the fixed element in the predetermined overhead rate would be:

    $13.7
    $17.2
    $19.7
    $15.2

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    Solution Summary

    The solution explains how to calculate the fixed element in the predetermined overhead rate

    $2.19

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