Precision company estimates its machine-hour requirements for the four quarters to be 35,000 hours, 20,000 hours, 15,000 hours, and 30,000 hours respectively. the variable manufacturing overhead rate is $4 per machine-hour. the fixed manufacturing overhead is $50,000 per quarter, which includes $20,000 of depreciation expense.

1.what is the budgeted variable manufacturing overhead for the year?

a) $200,000

b )$260,000

c) $280,000

d) $400,000

2. what is the predetermined overhead rate for the year?

a) $2 per machine hour

b) $4 per machine hour

c) $5 per machine hour

d )$6 per machine hour

Instructions are listed below.

Explanation:

Giving the following information:

Precision Company estimates its machine-hour requirements for the four quarters to be 35,000 hours, 20,000 hours, 15,000 hours, and 30,000 hours respectively. The variable manufacturing overhead rate is $4 per machine-hour. The fixed manufacturing overhead is $50,000 per quarter, which includes $20,000 of depreciation expense.

1) Total hours= 100,000 hours

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 100,000*4= $400,000

2) Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Total fixed overhead= 50,000*4= 200,000

Estimated manufacturing overhead rate= 200,000/ 100,000= $2 per hour

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