Q-Dot Manufacturing Uses a Predetermined Overhead Allocation Rate Based on Direct

question 17

Multiple Choice

Q-dot Manufacturing uses a predetermined overhead allocation rate based on direct labor hours.It has provided the following information for the year: $$\begin{array} { | l | l | } \hline \text { Manufacturing overhead costs allocated to production } & \$ 189,000 \\\hline \text { Actual direct materials cost } & \$ 540,000 \\\hline \text { Actual direct labor cost } & \$ 2,450,000 \\\hline \text { Actual direct labor hours } & 9400 \text { direct labor hours } \\\hline \text { Estimated machine hours } & 180,000 \text { machine hours } \\\hline\end{array}$$ Based on the above information,calculate Q-dot's predetermined overhead allocation rate.(Round your answer to two decimal places.)

• A) $1.05 per machine hour
• B) 7.71% of direct labor cost
• C) 35.00% of direct materials cost
• D) $20.11 per direct labor hour

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Definitions:

Unequal Cash Flows

Cash inflows or outflows over a period that vary in amount, which are crucial in investment analysis and capital budgeting.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.

Future Value

The value of a current asset at a specified date in the future based on an assumed rate of growth over time.

Decision-Making Process

A systematic approach to making choices among various alternatives, typically involving identification of the problem, generation of alternatives, evaluation, and selection of the best option.