Use the Information Below to Answer the Following Question(s)

question 13

Multiple Choice

Use the information below to answer the following question(s) .The following data were taken from the records of Big Sky Ltd., a manufacturing company.The company has been calculating the actual indirect cost allocation rate using direct labour hours as the allocation base.
-Normandeau Company's actual indirect cost pool amounted to $1,400,000 and the direct labour pool was $5,400,000.Overhead is allocated on the basis of direct labour hours.Actual and budgeted direct labour hours were 25,000 and 30,000 for the period.What is the manufacturing overhead cost allocation rate using actual direct labour hours as the cost allocation base?

• A)$46.67
• B)$272.00
• C)$75.00
• D)$226.67
• E)$56.00

---

Definitions:

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods, given a set of inputs, representing the trade-off between different choices.

Feasible Levels

Feasible levels indicate the range within which objectives or operations can be realistically achieved or maintained.

Opportunity Cost

The price paid by not choosing the second-best option available during a decision-making process.

Economy

The mechanism through which a society manufactures, allocates, and utilizes goods and services.