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Given budgeted overhead cost of $250,000 and budgeted machine-hours of 125,000, the overhead rate is $ per machine-hour. (Enter your answer as a whole number.)

Question

Given budgeted overhead cost of 250,000andbudgetedmachinehoursof125,000,theoverheadrateis250,000 and budgeted machine-hours of 125,000, the overhead rate is per machine-hour. (Enter your answer as a whole number.)

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Solution

To calculate the overhead rate per machine-hour, you need to divide the budgeted overhead cost by the budgeted machine-hours.

Here are the steps:

  1. Identify the budgeted overhead cost. In this case, it is $250,000.
  2. Identify the budgeted machine-hours. In this case, it is 125,000 hours.
  3. Divide the budgeted overhead cost by the budgeted machine-hours.

So, 250,000÷125,000=250,000 ÷ 125,000 = 2

Therefore, the overhead rate is $2 per machine-hour.

This problem has been solved

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