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Ikerd Company applies manufacturing overhead to jobs on the basis of machine-hours used. Overhead costs are estimated to total $283,725 for the year, and machine usage is estimated at 126,100 hours. For the year, $303,850 of overhead costs are incurred and 130,200 hours are used.
Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.52.)

Respuesta :

Answer:

$2.25 per hour

Explanation:

Given that,

Total estimated overhead costs = $283,725

Estimated machine usage = 126,100 hours

Overhead costs are incurred = $303,850

Hours used = 130,200

Manufacturing overhead rate:

= Total estimated overhead costs ÷ Estimated machine usage

= $283,725 ÷ 126,100 hours

= $2.25 per hour

Therefore, the manufacturing overhead rate for the year is $2.25 per hour.

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