Federer Company Is Debating the Use of Direct Labor Cost

question 320

Multiple Choice

Federer Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year: If Federer Company uses direct labor hours as the allocation base, what would the predetermined manufacturing overhead rate be?

• A)$1.51 per direct labor hour
• B)$1.70 per direct labor hour
• C)$1.40 per direct labor hour
• D)$1.83 per direct labor hour

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