For 2018, Rest-Well Bedding Uses Machine-Hours as the Only Overhead

question 10

Multiple Choice

For 2018, Rest-Well Bedding uses machine-hours as the only overhead cost-allocation base. The direct cost rate is $6.00 per unit. The selling price of the product is $21.00. The estimated manufacturing overhead costs are $275,000 and estimated 40,000 machine hours. The actual manufacturing overhead costs are $350,000 and actual machine hours are 50,000.
Using job costing, the 2018 actual indirect-cost rate is ________.

• A) $7.00 per machine-hour
• B) $5.50 per machine-hour
• C) $8.75 per machine-hour
• D) $8.50 per machine-hour

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Definitions:

Government Expenditures

Represents the total spending by the government on goods, services, and public works.

Money Supply

The entire pool of monetary assets at a specific point in an economy's timeline.

Aggregate Demand

The aggregate bid for all goods and services in an economy, pegged at a given price level throughout an agreed-upon time period.

Price Expectations

Anticipations or forecasts by consumers and businesses about future prices, which can influence their current buying and selling decisions.