Pinnacle Corp. budgeted $700,000 of overhead cost for the current year. Actual overhead costs for the year were $650,000. Pinnacle's plantwide allocation base, machine hours, was budgeted at 100,000 hours. Actual machine hours were 80,000. A total of 100,000 units was budgeted to be produced and 98,000 units were actually produced. Pinnacle's plantwide factory overhead rate for the current year is?

Answer:Overhead Rate for current year=$7 per machine hourStep-by-step explanation:Overhead Cost=$700000Machine Hours Budgeted=100000In order to calculate the Pinnacle's factory overhead rate for the current year we will consider the following formula:Overhead rate for the current year=Budgeted overhead cost for the current year/Machne hours budgeted[tex]Overhead rate for the current year=\frac{700000}{100000}[/tex]Overhead Rate for current year=$7So Pinnacle plantwide factory overhead rate for the current year is $7 per machine hour.