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

question 73

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: $$\begin{array} { | l | r | } \hline \text { Manufacturing overhead costs allocated to production } & \$ 185,000 \\\hline \text { Actual direct materials cost } & \$ 560,000 \\\hline \text { Actual direct labor cost } & \$ 2,500,000 \\\hline \text { Actual direct labor hours } & 9230 \text { direct labor hours } \\\hline \text { Estimated machine hours } & 180,000 \text { machine hours } \\\hline\end{array}$$ Based on the above information,calculate Q-dot's predetermined overhead allocation rate.(Round your answer to two decimal places.)

• A)$1.03 per machine hour
• B)7.40% of direct labor cost
• C)33.04% of direct materials cost
• D)$20.04 per direct labor hour

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Definitions:

Purchase Money

Funds that are used specifically for the acquisition of assets, often related to real estate transactions or personal property.

Installments

Payments that are made periodically towards a debt, allowing for the total amount to be paid off over time rather than all at once.

Financing Statement

A document filed by a creditor to give public notice of a security interest in property of the debtor, used in UCC filings.

Security Interest

A legal claim or lien on collateral that secures the performance of an obligation, typically the repayment of a debt.