Q-Dot Manufacturing Uses a Predetermined Overhead Allocation Rate Based on Direct

question 109

Multiple Choice

Q-dot Manufacturing uses a predetermined overhead allocation rate based on direct labor hours. It has provided the following information for the year 2014: $$\begin{array} { | l | r | } \hline \text { Manufacturing overhead costs allocated to production } & \$ 189,000 \\\hline \text { Actual direct materials cost } & \$ 560,000 \\\hline \text { Actual direct labor cost } & \$ 250,000 \\\hline \text { Actual direct labor hours } & 9,450 \text { direct labor hours } \\\hline \text { Estimated machine hours } & 180,000 \text { machine hours } \\\hline\end{array}$$ Based on the above information, calculate Q-dot's predetermined overhead allocation rate.

• A) $5.43 per machine hour
• B) 76% of direct labor cost
• C) 34% of direct materials cost
• D) $20 per direct labor hour

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Definitions:

Dividend

A Dividend is a portion of a company's earnings distributed to its shareholders, typically in the form of cash or additional shares.

Rate of Yield

The rate of yield is the return on an investment over a period of time, expressed as a percentage of the investment's cost.

Differential Rate

A rate that varies based on certain conditions or tiers, often used in interest rates or utility billing.

Commission Charges

Fees that are paid to an agent or service provider as compensation for facilitating transactions or services, typically calculated as a percentage of the sale price.