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A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for

A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

Denominator level of activity 3,300 MHs
Overhead costs at the denominator activity level:
Variable overhead cost $ 37,200
Fixed overhead cost $ 38,370

The following data pertain to operations for the most recent period:

Actual hours 3,200 MHs
Standard hours allowed for the actual output 3,340 MHs
Actual total variable manufacturing overhead cost $ 30,440
Actual total fixed manufacturing overhead cost $ 39,560

The predetermined overhead rate is closest to:

Multiple Choice

  • $23.62 per hour

  • $22.90 per hour

  • $21.88 per hour

  • $21.21 per hour

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