Answer the Following Questions Using the Information Below:
Comfort Manufacturing

question 35

Multiple Choice

Answer the following questions using the information below:
Comfort Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Winton High School band jacket job.
$\begin{array}{llc}&\text { Company }&\text { Winton High School Job }\\\text { Direct materials } & \$ 40,000 & \$ 2,000 \\\text { Direct labor } & \$ 10,000 & \$ 400 \\\text { Manufacturing overhead costs } & \$ 45,000 & \\\text { Machine-hours } & 100,000 \mathrm{mh} & 900 \mathrm{mh}\end{array}$
-For Comfort Manufacturing,what is the annual manufacturing overhead cost-allocation rate?

• A) $0.50
• B) $0.80
• C) $0.45
• D) $33.33

---

Definitions:

Scrap Value

A projection of the sale price for an asset at the point where it ceases to have utility.

Truck

A large motor vehicle designed for transporting goods by road.

Sum-Of-The-Years-Digits

A method of depreciation that accelerates costs based on the premise that an asset is more productive in its earlier years than its later years.

Scrap Value

The estimated residual value of an asset after its useful life has ended.