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

question 115

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: $$\begin{array} { | l | r | } \hline \text { Manufacturing overhead costs allocated to production } & \$ 189,000 \\\hline \text { Actual direct materials cost } & \$ 540,000 \\\hline \text { Actual direct labor cost } & \$ 2,450,000 \\\hline \text { Actual direct labor hours } & 9,400 \text { direct labor hours } \\\hline \text { Estimated machine hours } & 180,000 \text { machine hours } \\\hline\end{array}$$ Based on the above information,calculate Q-dot's predetermined overhead allocation rate.(Round your answer to two decimal places. )

• A)$1.05 per machine hour
• B)7.71% of direct labor cost
• C)35.00% of direct materials cost
• D)$20.11 per direct labor hour

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Definitions:

Sole Proprietorships

A business structure where a single individual owns and operates the business, taking full responsibility for its debts and obligations.

Business Registration

The process of officially recording a new business with the relevant governmental authority.

Express or Implied Agreement

A mutual understanding between parties to a contract where terms are specifically stated (express) or suggested by actions or circumstances (implied).

Partnership Capital

Funds contributed by partners to a partnership for the purpose of financing its operations, shared according to the partnership agreement.