Kelsh Company Uses a Predetermined Overhead Rate Based on Machine

question 33

Multiple Choice

Kelsh Company uses a predetermined overhead rate based on machine hours to apply manufacturing overhead to jobs.The company has provided the following estimated costs for next year:
Kelsh estimates that 5,000 direct labour hours and 10,000 machine hours will be worked during the year.What will be the predetermined overhead rate per hour?

• A) $6.80.
• B) $6.40.
• C) $3.40.
• D) $8.20.

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Definitions:

Percentage Of Idle Time

The proportion of time that resources remain unutilized during the production process.

Balanced Scorecard

A strategic planning and management system used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.

Financial

Relating to money or how money is managed, including aspects such as investments, expenses, and revenue generation.

Customer

An individual or entity that purchases goods or services from another entity, forming the basis of the business's revenue.