Gilchrist Corporation Bases Its Predetermined Overhead Rate on the Estimated

question 252

Multiple Choice

Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 79,000 machine-hours. The estimated variable manufacturing overhead was $7.38 per machine-hour and the estimated total fixed manufacturing overhead was $2,347,090. The predetermined overhead rate for the recently completed year was closest to:

• A) $37.09 per machine-hour
• B) $36.07 per machine-hour
• C) $7.38 per machine-hour
• D) $29.71 per machine-hour

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