Use the Information Below to Answer the Following Question(s)

question 93

Multiple Choice

Use the information below to answer the following question(s) .
Jim's Computer Products manufactures keyboards for computers. In June, the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $34,500 and $37,500, respectively. For Job 501, the actual costs incurred in the two departments were as follows:
Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production.
-Sara employs 25 professional cleaners. Budgeted costs total $900,000 of which $525,000 are direct costs. Actual indirect costs were $396,900. Budgeted professional labour hours are 500,000 and actual hours were 525,000. What is the budgeted direct cost assignment rate?

• A) $1.80 per hour
• B) $1.7857 per hour
• C) $0.75 per hour
• D) $1.05 per hour
• E) $1.00 per hour

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Definitions:

Inventory Types

Categories of inventory such as raw materials, work-in-progress, finished goods, and maintenance, repair, and operations (MRO) supplies.

Maintenance/Repair/Operating Supply

Items and materials necessary for the upkeep and repair of operations, equipment, and facilities in an organization.

Safety Stock Inventory

A quantity of inventory kept on hand as a buffer against fluctuations in demand or supply.

Inventory Model

An analytical approach or mathematical formula used to manage and control stock levels, optimizing inventory costs and meeting demand.