Sybil,IncUses a Predetermined Overhead Allocation Rate to Allocate Manufacturing Overhead

question 69

Multiple Choice

Sybil,Inc.uses a predetermined overhead allocation rate to allocate manufacturing overhead costs to jobs.The company recently completed Job 300X.This job used 11 machine hours and 5 direct labor hours.The predetermined overhead allocation rate is calculated to be $43 per machine hour.What is the amount of manufacturing overhead allocated to Job 300X using machine hours as the allocation base?

• A) $473
• B) $215
• C) $688
• D) $258

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Definitions:

Capital Rationing

The process of limiting the amount of capital available for investment in order to ensure optimal returns on investment projects.

Capital Investment Analysis

The process of reviewing and evaluating potential purchases or investments in capital assets to determine their financial viability and impact on the business.

Payback Period

The duration it takes for an investment to return its initial cost, measuring the time to break even.

Internal Rate of Return Method

A capital budgeting method used to estimate the profitability of potential investments, calculated as the rate that makes the net present value of all cash flows zero.