Spice Simmers Provided the Following Information from Its Accounting Records

question 110

Multiple Choice

Spice Simmers provided the following information from its accounting records for 2020: $\begin{array}{ll} \text { Expected production } & \text { 30,000 labour hours }\\ \text {Actual production } & \text { 28,000 labour hours}\\ \text {Budgeted overhead } &\$1,500,000\\ \text { Actual overhead } &\$1,450,000\\\end{array}$

How much is the overhead application rate if Spice Simmers bases the rate on direct labour hours?

• A)$51.79 per direct labour hour
• B)$48.33 per direct labour hour
• C)$50 per direct labour hour
• D)$46.67 per direct labour hour

---

Definitions:

Income

The remuneration accrued, notably in a recurrent manner, from labor or the investment of resources.

Substitution Effect

The economic principle that as prices rise or income decreases, consumers will replace more expensive items with less costly alternatives.

Income

The monetary amount received by an individual or entity in exchange for labor, services, or investment.

Price

The amount of money or compensation exchanged for the ownership or use of a good or service.