Archangel Manufacturing Calculated a Predetermined Overhead Allocation Rate at the Beginning

question 74

Multiple Choice

Archangel Manufacturing calculated a predetermined overhead allocation rate at the beginning of the year based on a percentage of direct labor costs. The production details for the year are given below: $\begin{array}{c}\begin{array}{|l|}\hline \text {Total manufacturing overhead estimated at the beginning of the year}\\\hline \text {Total direct labor costs estimated at the beginning of the year }\\\hline \text {Total direct labor hours estimated at the beginning of the year }\\\hline \text {Actual manufacturing overhead costs for the year}\\\hline \text {Actual direct labor costs for the year}\\\hline \text {Actual direct labor hours for the year}\\\hline\end{array}\begin{array}{r|}\hline\$140,000\\\hline\$350,000\\\hline12,400 \text { direct labor hours }\\\hline\$159,000\\\hline\$362,000\\\hline12,400 \text { direct labor hours }\\\hline\end{array}\end{array}$
Calculate the allocation rate for the year based on the above data.

• A) 40%
• B) 44%
• C) 250%
• D) 228%

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