Walsam Tools Applies Manufacturing Overhead Based on Direct Labor Hours

question 125

Multiple Choice

Walsam Tools applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for August follows: $$\begin{array} { l r r } & \text { Estimated } & \text { Actual } \\\text { Overhead cost } & \$ 160,000 & \$ 161,000 \\\text { Direct labor hours } & 8,000 & 8,200 \\\text { Direct labor cost } & \$ 120,000 & \$ 115,800\end{array}$$ How much is the predetermined overhead rate?

• A) $1.33
• B) $20.00
• C) $1.03
• D) $19.63

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