Answer: Plantwide factory overhead rate for the current year is $7.00 per machine hour.
Explanation:
Given that,
Budgeted overhead cost for the current year = $700,000
Actual overhead costs for the year = $650,000
Budgeted machine hours = 100,000 hours
Actual machine hours = 80,000 hours
Total units budgeted to be produced = 100,000 units
Total units actually produced = 98,000 units
Plantwide factory overhead rate for the current year is:
= [tex]\frac{Budgeted\ Overhead\ Cost\ in\ current\ year}{Budgeted\ machine\ hours}[/tex]
= [tex]\frac{700000}{100000}[/tex]
= $7.00 per machine hour
