Sparkle Company Uses Job Costing and Applies Overhead Using an }&\text

question 1

Multiple Choice

$\begin{array}{lccc}&\text { Direct }&\text {Direct}&\text { Direct }\\&\text { Materials }&\text {Labour Cost }&\text {Labour Hours }\\\text { Job 400 } & \$ 200 & \$ 800 & 40 \\\text { Job 401 } & 250 & 200 & 10 \\\text { Job 402 } & 500 & 600 & 30\end{array}$ Sparkle Company uses job costing and applies overhead using an actual costing system using direct labour hours as the allocation base. This period's estimated overhead cost is $400,000, estimated direct labour cost is $500,000 and estimated direct labour hours are 25,000. This period's actual overhead cost was $420,000, actual direct labour cost was $390,000, and actual direct labour hours were 20,000.
What is the overhead allocation rate?

• A) $21/hour
• B) $10/hour
• C) $16/hour
• D) $18/hour

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Definitions:

Career Development

A continuous process of managing one's professional path, skills, and goals to progress in their occupation.

Employment-at-will

A legal framework in many jurisdictions where employers or employees can terminate employment at any time without the need for cause, subject to certain exceptions.

Human Resource Management

The strategic approach to the effective management of an organization's workers so that they help the business gain a competitive advantage.

Talented Work Force

A group of employees that are highly skilled, knowledgeable, and capable in their respective fields.