The Managers at Elliot Manufacturing Are Discussing Ways to Allocate

question 47

Multiple Choice

The managers at Elliot Manufacturing are discussing ways to allocate the cost of support departments such as Quality Control and Maintenance to the operating departments. To aid them in this discussion, the controller has provided the following information: Budgeted hours of service:
If Elliot Manufacturing decides not to allocate support costs to the operating departments, the overhead allocated to each direct labour hour in the Assembly Department would be:

• A) $3.20
• B) $3.50
• C) $12.00
• D) $16.00

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Definitions:

Time Wages

A system of compensation based on the amount of time an employee works, usually expressed as an hour rate.