A Machine Shop Has Direct Materials Cost of $1,800,000 Direct

question 26

Multiple Choice

A machine shop has direct materials cost of $1,800,000 direct labour of $4,200,000 (direct labour rate is $50 per hour) and budgeted indirect manufacturing costs of $850,000.Management believes that indirect manufacturing costs increase with direct labour hours.What is the budgeted indirect manufacturing cost rate?

• A)$2.12
• B)$2.33
• C)$4.94
• D)$10.12
• E)$17.00

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Definitions:

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