Gabriel Company Uses the Department Approach for Allocating Overhead

question 48

Multiple Choice

Gabriel Company uses the department approach for allocating overhead.The Assembly Department uses direct labor hours as its allocation base and the Grinding Department uses machine hours as its allocation base.The data for each is as follows:

What is the allocation rate for each Department (round to the nearest cent) ?

• A)Assembly = $11.00 per direct labor hour;Grinding = $220.00 per machine hour.
• B)Assembly = $0.13 per direct labor hour;Grinding = $0.02 per machine hour.
• C)Assembly = $8.00 per direct labor hour;Grinding = $60.00 per machine hour.
• D)Assembly = $10.48 per direct labor hour;Grinding = $10.48 per machine hour.
• E)None of the answer choices is correct.

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Definitions:

Partnership Contract

A legal agreement between two or more parties who wish to manage and operate a business together in order to share its profits.

Public Corporations

Companies owned by the government that operate with the aim of serving the public interest and often have publicly traded shares.

Divested Corporations

Companies that have sold or disposed of a business unit or division to refocus their operations or strategies.

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Corporate entities characterized by a small number of shareholders, with shares that do not trade on public exchanges and are often family-owned or controlled.