Giannitti Corporation bases its predetermined overhead rate

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 $ 3.30? per machine-hour ? Estimated total fixed manufacturing overhead $ 838,770? ? The predetermined overhead rate for the recently completed year was closest to:

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 Estimated variable manufacturing overhead Estimated total fixed manufacturing overhead The predetermined overhead rate for the recently completed year was closest to 72,900 3.30per machine-hour $ 838,770

Solution

which is closest to 15

Both fixed and variable manufacturing overhead is included.

Predetermined overhead rate=Total estimated manufacturing overhead/estimated machine hours
		((72900*3.3)+838770)/72900
		(240570+838770)/72900
		14.81
Predetermined overhead rate=14.81
which is closest to 15 Both fixed and variable manufacturing overhead is included.