Here Are Selected Data for Garrett Company -If the Company Allocates Overhead Based on Direct Labor Cost,what

question 110

Multiple Choice

Here are selected data for Garrett Company: $\begin{array}{|l|r|r|l|}\hline \text { Estimated manufacturing overhead } & \$ 240,000 & \text { Factory utilities } & \$ 29,100 \\\hline \text { Estimated labor hours } & 35,000 & \text { Indirect labor } & \$ 23,500 \\\hline \text { Actual direct labor hours } & 36,000 & \text { Sales commissions } & \$ 53,700 \\\hline \text { Estimated direct labor cost } & \$ 300,000 & \text { Factory rent } & \$ 49,200 \\\hline \text { Actual direct labor cost } & \$ 320,000 & \text { Factory property taxes } & \$ 28,100 \\\hline \text { Factory depreciation } & \$ 67,200 & \text { Indirect materials } & \$ 33,000\\\hline\end{array}$

-If the company allocates overhead based on direct labor cost,what is the predetermined manufacturing overhead rate?

• A)94% of direct labor cost
• B)125% of direct labor cost
• C)75% of direct labor cost
• D)80% of direct labor cost

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Definitions:

Master Budget

A comprehensive financial plan that includes both operational and financial budgets, representing a company’s overall plan of action for a future period.

Budgeted Sales

The projected amount of sales revenue a company expects to receive within a specific period, as part of its financial planning process.

Credit Sales

Credit sales are transactions where the customer purchases goods or services on account, agreeing to pay the supplier at a later date.

Finished Goods Inventory

The stock of completed products that are ready to be sold by a company.