Jacson Corp

question 60

Multiple Choice

Jacson Corp.was undecided whether to use labor hours or labor cost in establishing the annual overhead rate.Labor costs are prone to fluctuate based on new hires,raises,retirements,and personnel leaving.They decided to compute both rates.The overhead costs for the year were estimated at $525,000 with expected direct labor hours of 35,000 and indirect hours of 15,000.Direct and indirect labor costs are estimated to be $420,000 and $210,000 respectively.The overhead application rate using either base (labor hours,labor cost) would be:

• A) $15 per hour;125% of labor cost.
• B) $10.50 per hour;83.3% of labor cost.
• C) $12 per hour;80% of labor cost.
• D) $12.60 per hour;120% of labor cost.

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Definitions:

SIDS

Sudden Infant Death Syndrome, an unexplained death, usually during sleep, of a seemingly healthy baby less than a year old.

World Health Organization

A specialized agency of the United Nations responsible for international public health, often abbreviated as WHO.

Disposition

An individual's inherent qualities of mind and character, or the way in which something is placed or arranged.

Cause of Death

The specific reason or event leading to an individual's death, typically determined by a medical professional.