Tidwell Industries Has the Following Overhead Costs and Cost Drivers

question 67

Multiple Choice

Tidwell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year. $\begin{array}{llrl}\text { Activity Cost Pool }&\text {Cost Driver }&\text {Est. Overhead }&\text {Cost Driver Activity }\\\hline\text { Ordering and Receiving } & \text { Orders } & \$ 120,000 & 500 \text { orders } \\\text { Machine Setup } & \text { Setups } & 297,000 & 450 \text { setups } \\\text { Machining } & \text { Machine hours } & 1,500,000 & 125,000 \mathrm{MH} \\\text { Assembly } & \text { Parts } & 1,200,000 & 1,000,000 \text { parts } \\\text { Inspection } & \text { Inspections } & 300,000 & 500 \text { inspections }\end{array}$ If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is

• A)$9.60.
• B)$12.00.
• C)$15.00.
• D)$34.17.

---

Definitions:

Paragraphs

Distinct sections of writing that deal with a particular point or idea, typically consisting of one or more sentences.

Business Messages

Communications that are related to the conduct of a business, including memos, reports, emails, and letters.

Descriptive Headings

Titles or headings that provide information about the content of the sections they precede.

Informative Headings

Titles or captions used in documents or presentations that provide clear and concise information about the content that follows.