A predetermined overhead rate is used to apply overheads to jobs. CBS company uses a predetermined overhead rate of $20 per machine hour. In obtaining this figure, the company's accountant used:

a.

Some other denominator for the current accounting period.

Das Ben is reviewing the cost structure of different products. The following information relate a product.
Direct Materials Inventory, beginning of the year$ 5,500
Direct Materials Inventory, end of the year$ 3,000
Direct Materials purchased during the year$45,000
Calculate the amount of direct materials used during the year.

a. $36,500.

b. $42,500.

c. $47,500.

d. $48,000.

e. Cannot be calculated with the information given.

b. a denominator of actual machine hours for the current accounting period.

c. a denominator of actual machine hours for the previous accounting period.

d. a numerator of budgeted machine hours for the current accounting period.

e. a numerator of actual machine hours for the current accounting period.

Answer rating: 100% (QA)

1 Predetermined overhead rate is the estimated overhead which is to be applied on units to recover i... View the full answer