Hyu Corporation Bases Its Predetermined Overhead Rate on the Estimated

question 40

Multiple Choice

Hyu Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 52,000 labor-hours. The estimated variable manufacturing overhead was $2.78 per labor-hour and the estimated total fixed manufacturing overhead was $1,192,360. The actual labor-hours for the year turned out to be 52,600 labor-hours. The predetermined overhead rate for the recently completed year was closest to:

• A) $2.78.
• B) $25.45.
• C) $25.71.
• D) $22.93.