Managerial Accounting

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Predetermined Overhead Rate for Plates

MGRACT-2EPTGV

Dixie Product Group manufactures paper plates for sale to wholesalers and retailers. To manufacture the paper plates, the firm estimates it will use 550,000 machine hours. Last year, the actual overhead costs were \$5,360,700. Those costs are not likely to change in the upcoming year. However, for this budgetary cycle, the company intends to invest \$275,000 in additional costs to retool the plate line.

What is the predetermined OH Rate?

A

$10.25

B

$9.75

C

$9.34

D

$10.00