Fortify, Inc Fortify Used 25,000 Direct Labor Hours and 50,000 Machine Hours

question 24

Multiple Choice

Fortify, 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:
$$\begin{array} { l r } \text { Direct materials } & \$ 150,000 \\\text { Direct labor } & 200,000 \\\text { Sales commissions } & 100,000 \\\text { Indirect labor } & 50,000 \\\text { Rent on office equipment } & 25,000 \\\text { Depreciation - factory building } & 75,000 \\\text { Utilities - factory } & 125,000\end{array}$$
Fortify 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:

Receive Payments

It refers to the process of collecting money from customers or clients for goods sold or services rendered.

Pay Sales Taxes

This term refers to the process of remitting taxes collected from customers on sales transactions to the relevant government authority.

Write Checks Window

In accounting software, a feature that allows users to fill out and record checks issued to pay for expenses or other transactions.

Rent Payments

Regular payments made by a tenant to a landlord in exchange for the right to occupy or use the landlord's property.