Templeton Widgets Applies Manufacturing Overhead Based on Direct Labor Hours

question 149

Multiple Choice

Templeton Widgets applies manufacturing overhead based on direct labor hours.It budgeted 123,000 direct labor hours at $11.50 per labor hour and incurred 125,000 direct labor hours at an actual total labor cost of $1,500,000.It incurred $720,000 of manufacturing overhead and estimated the manufacturing overhead cost to be $707,250 for the period.What was the predetermined overhead rate?

• A)$0.50
• B)$5.75
• C)$0.48
• D)$5.76

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Definitions:

Insurance

A contract by which the insurer promises to reimburse the insured or a beneficiary in the event that the insured is injured, dies, or sustains damage to property as a result of particular, stated contingencies.

Insurable Interest

A requirement in insurance policies that the policyholder must have a financial interest in the insured item or person that would cause financial loss if damaged or lost.

Appliance Corporation

A company that specializes in producing electrical or mechanical devices intended to perform certain tasks, typically domestic ones.

Cash Discount Stores

Retail outlets offering goods for sale at lower prices due to immediate payment instead of credit purchase.