Archangel Manufacturing Calculated a Predetermined Overhead Allocation Rate at the Beginning

question 158

Multiple Choice

Archangel Manufacturing calculated a predetermined overhead allocation rate at the beginning of the year based on direct labor costs.The production details for the year are given below:

Calculate the manufacturing overhead allocation rate for the year based on the above data.(Round your final answer to two decimal places. )

• A)43.75%
• B)257.14%
• C)11.43%
• D)22.95%

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Definitions:

Production Needs

The specific requirements for manufacturing including materials, labor, and overhead to meet demand.

Master Budget

An all-encompassing financial plan for a company, consolidating all its individual budgets related to sales, cost of goods sold, operating expenses, assets, liabilities, and cash flows.

Direct Labor

The wages and related expenses for workers who are directly involved in the production of goods.

Cost of Tracie's Direct Labor

The cost of Tracie's direct labor refers to the wages and associated expenses for the hours worked directly on products or services by Tracie, as an example of an employee's labor costs.