The predetermined overhead rate for the Casting Department is closest to:

A) $9.70 per machine-hour
B) $7.60 per machine-hour
C) $2.10 per machine-hour
D) $27.71 per machine-hour

Predetermined Overhead Rate

A rate calculated before a production period that estimates the amount of manufacturing overhead cost per unit of allocation base, used to apply overhead costs to goods produced.

Casting Department

A specific section within a manufacturing facility where the process of casting—shaping material by pouring it into a mold and allowing it to solidify—is performed.

Machine-Hour

A unit of measure for the operational time of machinery, critical for calculating production costs and efficiency in a manufacturing context. This is essential in allocating costs based on the usage duration of machinery.