Simoneaux Corporation Bases Its Predetermined Overhead Rate on the Estimated

question 88

Multiple Choice

Simoneaux 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 company estimated the machine-hours for the upcoming year at 22,000 machine-hours.The estimated variable manufacturing overhead was $8.65 per machine-hour and the estimated total fixed manufacturing overhead was $609,400.The predetermined overhead rate for the recently completed year was closest to:

• A)$36.35 per machine-hour
• B)$27.70 per machine-hour
• C)$33.32 per machine-hour
• D)$8.65 per machine-hour

---

Definitions:

Equivalent Units

A measure used in cost accounting to express the amount of work done on incomplete units in terms of fully completed units.

Direct Materials

The raw materials that are directly used in the manufacturing of a product, which can be easily traced to the finished product.

Conversion

The process of changing or converting resources or inputs into final products or outcomes.

Indirect Materials

Any materials needed to make a product that are not directly traced to the product.