K Company Estimates That Overhead Costs for the Next Year

question 91

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)$0.02 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)$0.10 per direct labor hour.

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