Use the Following Information for the Next 2 Questions

question 37

Multiple Choice

Use the following information for the next 2 questions. Allen's Accounting Services uses job costing and applies overhead using a normal costing system using professional labor hours as the allocation base. This period's estimated overhead cost is $400,000, estimated professional labor cost is $800,000 and estimated direct labor hours are 8,000. This period actual overhead cost was $426,400, actual direct labor cost was $820,000, and actual direct labor hours were 8,200.
-What is the overhead allocation rate?

• A) $60/hour
• B) $55/hour
• C) $52/hour
• D) $50/hour

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values in the data set deviate from the mean.

Sampling Distribution

The statistical probability distribution originating from a random sample, aimed at facilitating inferences concerning the population.

Spread Out

Describes how much a dataset is stretched or compressed, indicating the variability or dispersal of the data points.

Central Limit Theorem

A statistical theory that states that, given a sufficiently large sample size, the sampling distribution of the mean for a variable will approximate a normal distribution, regardless of the variable's distribution in the population.