Felton Quality Productions Uses a Predetermined Overhead Allocation Rate Based

question 26

Multiple Choice

Felton Quality Productions uses a predetermined overhead allocation rate based on machine hours. It has provided the following information for the year 2014: $$\begin{array} { | l | r | } \hline \text { Actual manufacturing overhead costs incurred } & \$ 90,000 \\\hline \text { Manufacturing overhead costs allocated to production } & \$ 42,500 \\\hline \text { Actual direct materials cost } & \$ 220,000 \\\hline \text { Actual direct labor cost } & \$ 46,000 \\\hline \text { Actual direct labor hours } & 2,000 \\\hline \text { Actual machine hours } & 30,000 \\\hline\end{array}$$ Based on the above information, calculate the manufacturing overhead rate applied by Felton.

• A) $1.42 per machine hour
• B) $1.53 per machine hour
• C) $7.33 per machine hour
• D) $3.00 per machine hour

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Definitions:

Appraisal Cycle

A recurring review process of assessing employee performance over a set period, typically annually.

Promoted

To be elevated to a higher position or rank often accompanied by increased responsibilities and benefits.

Performance

The act or process of carrying out a task or function, often measured against known standards of accuracy, completeness, cost, and speed.

Corrective

Intended to rectify or improve something by eliminating errors or defects.