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Hibshman corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. at the beginning of the most recently completed year, the corporation estimated the machine-hours for the upcoming year at 10,000 machine-hours. the estimated variable manufacturing overhead was $6.82 per machine-hour and the estimated total fixed manufacturing overhead was $230,200. the predetermined overhead rate for the recently completed year was closest to:

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MissPhiladelphia
In getting the predetermined overhead rate, the estimated total manufacturing overhead should be divided to the total amount of the allocation base. With that, the formula should be like this:

Estimated total manufacturing overhead = $230,200 + ($6.82 per machine-hour X 10,000 machine-hours) = $298,400

overhead rate = $298,400 / 10,000  = $29.84

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