Explore BrainMass

Explore BrainMass

    Predetermined overhead rate

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Question 17: (1 point)
    Keeran Corporation's flexible budget for two levels of activity appears below:

    Cost Formula (per machine-hour) Activity
    (in machine-hours)
    6,000 6,100
    Variable overhead costs:
    Lubricants $3.4 $ 20,400 $ 20,740
    Power 1 6,000 6,100
    Total variable overhead cost $4.4 26,400 26,840
    Fixed overhead costs:
    Depreciation 18,480 18,480
    Taxes 7,920 7,920
    Total fixed overhead cost 26,400 26,400
    Total overhead cost $52,800 $53,240

    If the denominator level of activity is 6,000 machine-hours, the variable element in the predetermined overhead rate would be:

    $4.4
    $8.73
    $10.78
    $39.42

    © BrainMass Inc. brainmass.com June 3, 2020, 9:59 pm ad1c9bdddf
    https://brainmass.com/business/accounting/predetermined-overhead-rate-flexible-budgets-209277

    Solution Summary

    The solution explains how to calculate the predetermined overhead rate.

    $2.19

    ADVERTISEMENT