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For​ 2018, Rest-Well Bedding uses​ machine-hours as the only overhead​ cost-allocation base. The direct cost rate is​ $6.00 per unit. The selling price of the product is​ $21.00. The estimated manufacturing overhead costs are​ $275,000 and estimated​ 40,000 machine hours. The actual manufacturing overhead costs are​ $350,000 and actual machine hours are​ 50,000. Using job​ costing, the 2018 actual​ indirect-cost rate is​ ________.

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facundobuzzetti

Answer:

Predetermined manufacturing overhead rate= $6.875 per machine-hour

Explanation:

Giving the following information:

The estimated manufacturing overhead costs are​ $275,000 and an estimated​ 40,000 machine hours.

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 275,000/40,000

Predetermined manufacturing overhead rate= $6.875 per machine-hour

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