Yellow Company Uses a Plantwide Overhead Rate with Machine Hours

question 10

Multiple Choice

Yellow Company uses a plantwide overhead rate with machine hours as the allocation base.Use the following information to solve for the amount of machine hours estimated per unit of product RST. $\begin{array}{lr} \text {Direct material cost per unit of RST } &\$ 12 \\ \text {Total estimated manufacturing overhead } &\$ 200,000 \\ \text {Total cost per unit of RST } &\$ 75 \\ \text { Total estimated machine hours } &100,000 \\ &\mathrm{MH} \\ \text { Direct labor cost per unit of RST } &\$ 23\end{array}$

• A)40 MH per unit of RST.
• B)2 MH per unit of RST.
• C)20 MH per unit of RST.
• D)37.5 MH per unit of RST.
• E)80 MH per unit of RST.

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Definitions:

Supply Shift

A change in the availability of a product or service, often influenced by factors such as production costs and technological advances, shifting the supply curve.

Excise Tax

A type of tax imposed on specific goods, services, or activities, often included in the price of products like gasoline, alcohol, and tobacco.

Tax Borne

The final economic burden of a tax, indicating who ultimately bears the cost of taxation.

Wage Tax

A tax imposed on employees' earnings, typically deducted from their paychecks by the employer and paid to the government.