Lightner Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 50,000 Estimated variable manufacturing overhead$8.82per machine-hourEstimated total fixed manufacturing overhead$1,077,000 Required:Compute the company's predetermined overhead rate.
What will be an ideal response?
Estimated total manufacturing overhead = $1,077,000 + ($8.82 per machine-hour × 50,000 machine-hours) = $1,518,000
Predetermined overhead rate = $1,518,000 ÷ 50,000 machine-hours = $30.36 per machine-hour
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