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