Question 1

Smith Paints allocates overhead based on machine hours. Selected data for the most recent year is as follows:

Estimated manufacturing overhead cost	R250 000
Actual manufacturing overhead cost	R300 000
Estimated machine hours	20 000
Actual machine hours	21 000

The estimates were made as of the beginning of the year, while the actual results were for the entire year.

Calculate the predetermined overhead rate

	A.	R14.29
	B.	R12.50
	C.	R11.90
	D.	R15.00