Renteria Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $305,000 for the year, and machine usage is estimated at 125,000 hours.
For the year, $322,000 of overhead costs are incurred and 130,000 hours are used.


Compute the manufacturing overhead rate for the year.

$

Manufacturing overhead rate:
Expected overheads/expected usage
$305,000/125,000
= $2.44 per hour