A Furniture Corporation Manufactures Two Models of Furniture-Standard and Deluxe

question 71

Multiple Choice

A furniture corporation manufactures two models of furniture-Standard and Deluxe.The total estimated manufacturing overhead costs are $64,200.The following estimates are available: $$\begin{array} { | l | r | r | } \hline & \text { Standard } & \text { Deluxe } \\\hline \text { Direct materials cost per unit } & \$ 250 & \$ 290 \\\hline \text { Direct labor cost per unit } & \$ 125 & \$ 140 \\\hline \text { Number of units } & 240 & 600 \\\hline\end{array}$$ The company uses direct labor costs as the base to allocate manufacturing overhead.Calculate the predetermined overhead rate.(Round your answer to two decimal places.)

• A)27.44%
• B)29.23%
• C)191.07%
• D)56.32%

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Definitions:

Accumulated Depreciation

The total depreciation that has been applied to a fixed asset since it was acquired, representing the loss of value over time.

Balance Sheet

A financial record showing the balance of assets, liabilities, and equity of shareholders of an enterprise on a specific date.

Fair Market Value

The price that a property would sell for on the open market, between a willing buyer and a willing seller.

Trade-In Allowance

The value credited to a customer when they exchange an older item towards the purchase of a new item, often used in automotive and electronics sales.