Avatar Corporation Uses a Predetermined Rate to Apply Overhead

question 112

Multiple Choice

Avatar Corporation uses a predetermined rate to apply overhead. At the beginning of the year, Avatar estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000. Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000. What is the predetermined overhead rate per machine hour for Avatar?

• A) $6.08
• B) $5.85
• C) $22.66
• D) $24.00

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Definitions:

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