Reamer Corporation Uses a Predetermined Overhead Rate Based on Machine-Hours

question 213

Multiple Choice

Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs.The Corporation has provided the following estimated costs for next year:
Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year.The predetermined overhead rate per hour will be:

• A) $6.80 per machine-hour
• B) $6.00 per machine-hour
• C) $3.00 per machine-hour
• D) $3.40 per machine-hour

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