Aaron, Inc estimates direct labor costs and manufacturing overhead costs for the coming year to be $750,000 and $550,000, respectively
Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 18,000 hours and 7,000 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.)
A) $107.14 per machine hour
B) $30.56 per labor hour
C) $1.36 per labor hour
D) $78.57 per machine hour
D .D) Predetermined overhead allocation rate = Total estimated overhead costs / Total estimated quantity of the overhead allocation base
Predetermined overhead allocation rate = $550,000 / 7,000 machine hours = $78.57 per machine hour
You might also like to view...
In what section of the statement of cash flows would the purchase of office equipment for $10,000 cash appear?
A. Operating activities B. Investing activities C. Financing activities D. In the notes to the statement of cash flows
Refer to Table 16.2. Loading Dock One (LDO) is facing change due to:
A) government regulation. B) a performance gap. C) global economic competition. D) the introduction of new technology.