Arabica Manufacturing Uses a Predetermined Overhead Allocation Rate Based on the Number

question 55

Multiple Choice

Arabica Manufacturing uses a predetermined overhead allocation rate based on the number of machine hours. At the beginning of 2015, they estimated total manufacturing overhead costs to be $1,050,000, total number of direct labor hours to be 5,000, and total number of machine hours to be 25,000 hours. What was the predetermined overhead allocation rate?

• A)$35 per machine hour
• B)$210 per direct labor hour
• C)$42 per machine hour
• D)$35 per direct labor hour

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Definitions:

ANOVA Table

A statistical table used to analyze the differences among group means in a sample.

Critical Value

A threshold in hypothesis testing that determines the boundary for rejecting the null hypothesis.

Normal Distributions

Probability distributions that are symmetrically bell-shaped, where data tends to cluster around a central mean value.

Equal Variances

A condition where two or more populations have the same variance.