Kelsh Company Uses a Predetermined Overhead Rate Based on Machine-Hours

question 7

Multiple Choice

Kelsh Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year: Kelsh estimates that 5,000 direct labor-hours and 10,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be:

• A)$6.80
• B)$6.40
• C)$3.40
• D)$8.20