The Thomlin Company forecasts that total overhead for the cu

The Thomlin Company forecasts that total overhead for the current year will be $11,858,000 with 179,000 total machine hours. Year to date, the actual overhead is $7,722,000 and the actual machine hours are 85,000 hours. The predetermined overhead rate based on machine hours is

Round the factory overhead rate to the nearest dollar before multiplying by the number of hours.

$66 per machine hour

$43 per machine hour

$91 per machine hour

$140 per machine hour

Solution

Predetermine overhead rate = Estimated overhead cost/Estimated machine hour

= 11858000/179000

Predetermine overhead rate = 66 per machine hour

So answer is a) $66 per machine hour