The Following Budget Data Are Available for Sharp Company If Factory Overhead Is to Be Applied Based on Direct

question 184

Multiple Choice

The following budget data are available for Sharp Company: $$\begin{array} { l r } \text { Estimated direct labor hours } & 12,000 \\\text { Estimated direct labor doll ars } & \$ 90,000 \\\text { Estimated factory overhead costs } & \$ 179,000 \\\text { Actual direct lab or hours } & 11,500 \\\text { Actual direct labor dollars } & \$ 92,000 \\\text { Actual factory overhead costs } & \$ 180,000\end{array}$$ If factory overhead is to be applied based on direct labor dollars, the predetermined overhead rate is

• A) 199%
• B) 196%
• C) $14.92
• D) $15.65

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Definitions:

International Quality Standards

A set of formalized rules and guidelines for production and manufacturing that ensure products meet certain requirements for global trade.

ISO 9000

The set of standards that certifies that a business is using processes and principles to ensure the production of quality products.

Six Sigma

The tolerance range in which only 3.4 defects per million are allowed.

Defects

Imperfections or faults in a product or process that can result in a failure to meet desired quality standards.