Midwest Corporation Has Provided the Following Data Concerning Manufacturing Overhead

question 110

Multiple Choice

Midwest Corporation has provided the following data concerning manufacturing overhead for 2020:
$\begin{array}{lrr} \text {Estimated manufacturing overhead for the year } &\$30,000\\ \text { Estimated direct labor hours for the year } &2,000\\\end{array}$

Two jobs were worked on during the year: Job A-101 and Job A-102. The number of direct labor-hours spent on Job A-101 and Job A-102 were 1,200 and 1,000, respectively. The actual manufacturing overhead was $37,000.
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What is the predetermined manufacturing overhead rate per direct labor hour for the year?

• A) $15.
• B) $20.
• C) $25.
• D) $30.

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Definitions:

Generally Accepted Accounting Principles (GAAP)

A set of rules and standards for financial reporting commonly used in the United States.

Globalization on Business

The impact of increasing global interconnectivity on business operations, including expanded markets, diversified supply chains, and increased competition.

Just-In-Time (JIT)

A supply chain management strategy that aims to reduce inventory costs by receiving goods only as they are needed in the production process.

Manufacturing Company

A company that produces finished goods from raw materials through the use of labor and machinery.