Barr Mfg Provided the Following Information from Its Accounting Records for for 2017

question 187

Multiple Choice

Barr Mfg. provided the following information from its accounting records for 2017:
$\begin{array}{lr}\text { Expected production } & 60,000 \text { labor hours } \\\text { Actual production } & 56,000 \text { labor hours } \\\text { Budgeted overhead } & \$ 900,000 \\\text { Actual overhead } & \$ 870,000\end{array}$
How much is the overhead application rate if Barr bases the rate on direct labor hours?

• A) $16.07 per hour
• B) $15.00 per hour
• C) $14.50 per hour
• D) $15.54 per hour

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Definitions:

Spot Market

A public financial market in which commodities, currencies, or securities are bought and sold for immediate delivery.

Donkey Rental

A service sector business involving the temporary leasing of donkeys, often for transport or tourist purposes.

Industrial Sales

Transactions involving goods or services sold from one business to another for operational or production purposes, typically in large quantities.

Production Capacity

The maximum output rate that a facility can achieve under normal operating conditions.