Pinacle Corp. budgeted $262,660 of overhead cost for 2012. Actual overhead costs
ID: 2454064 • Letter: P
Question
Pinacle Corp. budgeted $262,660 of overhead cost for 2012. Actual overhead costs for the year were $262,090. Pinacle's plantwide allocation base, machine hours, was budgeted at 48,270 hours. Actual machine hours were 54,540. A total of 93,480 units was budgeted to be produced and 98,000 units were actually produced. Pinacle's plantwide factory overhead rate for 2012 is:
Round to the nearest cent. Select the correct answer.
a. $5.44 per machine hour
b. $2.81 per machine hour
c. $2.80 per machine hour
d. $5.43 per machine hour
Explanation / Answer
Budgeted overheads = $262660
Budgeted machine hours = 48270
Plantwide factory overhead rate = 262660/48270 = $5.44 per machine hour