# Question & Answer: Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning…..

Gilchrist 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 Corporation estimated the machine-hours for the upcoming year at 79,000 machine-hours. The estimated variable manufacturing overhead was \$7.38 per machine-hour and the estimated total fixed manufacturing overhead was \$2,347,090. The predetermined overhead rate for the recently completed year was closest to: A) \$37.09 per machine-hour B) \$36.07 per machine-hour C) \$7.38 per machine-hour D) \$29.71 per machine-hour Beat Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Recently, Job M7S9 was completed. It required 60 machine-hours The amount of overhead applied to Job M7S9 is closest to: A) \$750 B) \$516 C) \$984 D) \$234 Session Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Recently, Job K913 was completed with the following characteristics:

Answer 18 – Predetermined Fixed OH rate = Estimated FOH / Estimated machine hours = 2347090 / 79000 = \$ 29.71 per machine hour

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Question & Answer: Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning…..
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Predetermined OH rate = Predetermined Fixed OH rate + Predetermined variable OH rate = \$ 29.71 + \$ 7.38 = \$ 37.09 per machine hour ( Option A is correct )

Predetermined Fixed OH rate = Estimated FOH / Estimated machine hours = 344000 / 40000 = \$ 8.6 per machine hour

Predetermined OH rate = Predetermined Fixed OH rate + Predetermined variable OH rate = \$ 8.6 + \$ 3.9 = \$ 12.5 per machine hour

Overheaqd applied to job – \$ 12.50 * 60 = \$ 750  ( Option A is correct )