West Company Estimates That Overhead Costs for the Next Year

question 163

Multiple Choice

West Company estimates that overhead costs for the next year will be $5,240,000 for indirect labor and $550,000 for factory utilities.The company uses machine hours as its overhead allocation base.If 150,000 machine hours are planned for this next year,what is the company's plantwide overhead rate?

• A)$0.0259 per machine hour.
• B)$34.93 per machine hour.
• C)$38.60 per machine hour.
• D)$3.67 per machine hour.
• E)$0.2727 per machine hour.

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Definitions:

Economic Strike

A stoppage of work by union members to protest against economic conditions such as wages, benefits, and working hours, rather than workplace rights or unfair labor practices.

Unfair Labor Practices

These are actions by employers or unions that violate the rights of employees or breach labor laws, such as discrimination or coercion.

NLRA

The National Labor Relations Act of 1935, also known as the Wagner Act, which protects the rights of employees to organize and to bargain collectively with their employers.

Collective Bargaining Agreement

A legally binding agreement resulting from negotiations between an employer and a union representing the employees, setting out the terms and conditions of employment.