(Appendix 2B) Dunnings Woodworking Corporation Produces Fine Cabinets

(Appendix 2B) Dunnings Woodworking Corporation produces fine cabinets. The company uses a job-order costing system in which its predetermined overhead rate is based on capacity. The capacity of the factory is determined by the capacity of its constraint, which is an automated router. Additional information is provided below for the most recent month:

-If the company bases its predetermined overhead rate on the estimated amount of the allocation base for the upcoming year,then the predetermined overhead rate is closest to:

A) $1.32 per machine-hour
B) $1.49 per machine-hour
C) $0.99 per machine-hour
D) $1.54 per machine-hour

Correct Answer:

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