To compute the plantwide predetermined overhead rate based on machine-hours, we need to use the following formula:

$\text{Predetermined Overhead Rate} = \frac{\text{Total Estimated Manufacturing Overhead}}{\text{Total Estimated Machine-Hours}}$

Step 1: Calculate the Total Estimated Manufacturing Overhead

• Fixed Manufacturing Overhead: $1,020,000
• Variable Manufacturing Overhead: $5.00 per machine-hour

Now, let's calculate the variable manufacturing overhead based on the total estimated machine-hours:

$\text{Variable Overhead} = \text{Estimated Machine-Hours} \times \text{Variable Overhead Rate}$ $\text{Variable Overhead} = 55,000 \, \text{machine-hours} \times 5.00 \, \text{\$ per machine-hour} = 275,000$

Therefore, the total estimated manufacturing overhead is:

$\text{Total Manufacturing Overhead} = \text{Fixed Overhead} + \text{Variable Overhead}$ $\text{Total Manufacturing Overhead} = 1,020,000 + 275,000 = 1,295,000$

Step 2: Calculate the Predetermined Overhead Rate

Using the total estimated machine-hours of 55,000:

$\text{Predetermined Overhead Rate} = \frac{1,295,000}{55,000} = 23.55 \, \text{\$ per machine-hour}$

Thus, the plantwide predetermined overhead rate is $23.55 per machine-hour.

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Do you need further details or have any questions?

Here are some related questions you might consider:

1. How would the use of departmental rates affect the overhead allocation?
2. How is the variable manufacturing overhead different for each department?
3. What are the potential benefits of using departmental rates instead of plantwide rates?
4. How would underapplied or overapplied overhead be adjusted if it occurred?
5. How do direct labor and machine-hours impact the cost allocation?

Tip: When calculating overhead rates, remember to distinguish between fixed and variable components. They contribute differently to the total overhead based on production levels.