Tidwell Industries Has the Following Overhead Costs and Cost Drivers

question 65

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 activity-based costing, the overhead application rate for ordering and receiving is

• A)$1.20 per direct labor hour.
• B)$240 per order.
• C)$0.12 per part.
• D)$6,834 per order.