K Company Estimates That Overhead Costs for the Next Year

question 165

Multiple Choice

K Company estimates that overhead costs for the next year will be $2,900,000 for indirect labor and $800,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 80,000 direct labor hours are planned for this next year, what is the company's plantwide overhead rate?

• A) $.02 per direct labor hour.
• B) $46.25 per direct labor hour.
• C) $36.25 per direct labor hour.
• D) $10 per direct labor hour.
• E) $.10 per direct labor hour.

---

Definitions:

Space and Time

Fundamental entities in physics and philosophy that denote the three-dimensional region in which all physical events occur (space) and the sequential order of events (time).

Immanuel Kant

An 18th-century German philosopher known for his work in epistemology, metaphysics, and ethics, particularly his theory of knowledge and moral philosophy.

Space and Time

Fundamental physical concepts defining the universe's structure; space refers to the three-dimensional extension in which objects exist, and time to the progression of events from past through present to future.

Physical World

The material universe that exists independently of our perceptions, consisting of matter and energy and governed by physical laws.