Perry Moldings has the following estimated costs for the upcoming year:
Direct labor costs $62,000
Direct materials used $25,000
Salary of factory supervisor $39,000
Sales commissions $8,000
Heating and lighting costs for factory $22,000
Depreciation on factory equipment $5,000
Advertising expense $33,000
The company estimates that 1,200 direct labor hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year. The predetermined manufacturing overhead rate per machine hour is closest to
A) $52.
B) $97.
C) $14.
D) $33.
D
Explanation: D) $39,000 + 22,000 + 5,000 = $66,000 / 2,000 = $33
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