north company budgets overhead costs for the next year of $3,500,000 for indirect labor and $940,000 for…

north company budgets overhead costs for the next year of $3,500,000 for indirect labor and $940,000 for factory utilities. the company uses machine hours as its overhead allocation base. if 100,000 machine hours are planned for this next year; what is the companys plantwide overhead rate? multiple choice $0.0225 per machine hour. $35.00 per machine hour. $44.40 per machine hour. $9.40 per machine hour. $0.1064 per machine hour.

north company budgets overhead costs for the next year of $3,500,000 for indirect labor and $940,000 for factory utilities. the company uses machine hours as its overhead allocation base. if 100,000 machine hours are planned for this next year; what is the companys plantwide overhead rate? multiple choice $0.0225 per machine hour. $35.00 per machine hour. $44.40 per machine hour. $9.40 per machine hour. $0.1064 per machine hour.

Answer

Explanation:

Step1: Calculate total overhead costs

Total overhead costs = Indirect labor + Factory utilities = $3500000 + 940000=4440000$

Step2: Calculate plant - wide overhead rate

Plant - wide overhead rate = $\frac{\text{Total overhead costs}}{\text{Machine - hours}}$ = $\frac{4440000}{100000}=44.40$

Answer:

C. $44.40 per machine hour