Q-Dot Manufacturing Uses a Predetermined Overhead Allocation Rate Based on Direct

question 112

Multiple Choice

Q-dot Manufacturing uses a predetermined overhead allocation rate based on direct labor hours. It has provided the following information for the year 2014: $$\begin{array} { | l | r | } \hline \text { Manufacturing overhead costs allocated to production } & \$ 189,000 \\\hline \text { Actual direct materials cost } & \$ 560,000 \\\hline \text { Actual direct labor cost } & \$ 250,000 \\\hline \text { Actual direct labor hours } & 9,450 \text { direct labor hours } \\\hline \text { Estimated machine hours } & 180,000 \text { machine hours } \\\hline\end{array}$$ Based on the above information, calculate Q-dot's predetermined overhead allocation rate.

• A) $5.43 per machine hour
• B) 76% of direct labor cost
• C) 34% of direct materials cost
• D) $20 per direct labor hour

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