Techniques,Inc

question 52

Multiple Choice

Techniques,Inc.uses a predetermined manufacturing overhead rate based on direct labor hours to apply its indirect product costs to jobs.The following information has been collected for the previous year: Techniques used 25,000 direct labor hours and 50,000 machine hours during the previous year.What is the predetermined overhead rate per direct labor hour?

• A)$24.00
• B)$15.00
• C)$14.00
• D)$10.00

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Definitions:

Unit Contribution Margin

The measured profit that each unit sold contributes toward fixed costs and profit, calculated by subtracting variable costs from the sales price per unit.

Operating Income

Earnings before interest and taxes (EBIT), which represents the profit a company earns from its core operations.

Fixed Costs

Overhead expenses that remain constant regardless of the volume of activity or production levels within a company.

Cost-volume-profit Analysis

An accounting tool used to determine the effects of changes in costs and volume on a company's profits.