Answer:
The predetermined overhead rate for machine hours is calculated by dividing the estimated manufacturing overhead cost total by the estimated number of machine hours
Explanation:
if the annual budget is based on a production quantity of 10,000 units and the direct labor required for each unit is three hours, the total direct labor is 10,000 x 3 or 30,000 hours. The total overhead expenditure is then divided by the total labor hours to arrive at the overhead rate.
