Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 72,900 Estimated variable manufacturing overhead$3.50per machine-hourEstimated total fixed manufacturing overhead$838,710 The predetermined overhead rate for the recently completed year was closest to: Multiple ChoiceA. $6.66 per machine-hourB. $10.50 per machine-hourC. $8.69 per machine-hourD. $15.00 per machine-hour

Answered: Giannitti Corporation bases its…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

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Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below:


Estimated machine-hours		72,900
Estimated variable manufacturing overhead	$	3.50	per machine-hour
Estimated total fixed manufacturing overhead	$	838,710

The predetermined overhead rate for the recently completed year was closest to:

Multiple Choice

A. $6.66 per machine-hour

B. $10.50 per machine-hour

C. $8.69 per machine-hour

D. $15.00 per machine-hour

Expert Solution

Step 1 Introduction

The predetermined overhead rate is calculated as estimated total manufacturing overhead cost divided by base activity.

This predetermined overhead rate is further used to compute the actual expenses on the production.

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