Reamer Corporation Uses a Predetermined Overhead Rate Based on Machine-Hours

question 45

Multiple Choice

Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year: Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be:

• A) $6.80 per machine-hour
• B) $6.00 per machine-hour
• C) $3.00 per machine-hour
• D) $3.40 per machine-hour

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Definitions:

Assumptions

Deeply held beliefs that guide behavior and tell members of an organization how to perceive situations and people.

Basic Assumptions

Fundamental beliefs that are taken for granted within an organizational culture or societal context.

Organizational Hierarchy

The arrangement of individuals within an organization according to power, status, and job functions, creating a structure of authority.

Corporate Culture

The shared values, beliefs, and practices that characterize an organization and its members.