Use the Following Information for the Next 2 Questions

question 92

Multiple Choice

Use the following information for the next 2 questions. O'Hare Sisters Manufacturing uses job costing and applies overhead using a normal costing system using direct labor hours as the allocation base. This period's estimated overhead cost is $400,000, estimated direct labor cost is $500,000 and estimated direct labor hours are 25,000. This period actual overhead cost was $420,000, actual direct labor cost was $390,000, and actual direct labor 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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