Olympia Manufacturing Uses a Predetermined Overhead Allocation Rate Based on a Percentage

question 115

Multiple Choice

Olympia Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost.At the beginning of the year,Olympia estimated total manufacturing overhead costs at $1,020,000 and total direct labor costs at $830,000.In June,Job 511 was completed.The details of Job 511 are shown below. $$\begin{array} { | l | r | } \hline \text { Direct materials cost } & \$ 25,000 \\\hline \text { Direct labor cost } & \$ 13,000 \\\hline \text { Direct labor hours } & 500 \text { hours } \\\hline \text { Units of product produced } & 200 \text { hours } \\\hline\end{array}$$ What is the amount of manufacturing overhead costs allocated to Job 511? (Round any percentages to two decimal places and your final answer to the nearest dollar.)

• A) $15,976
• B) $30,723
• C) $10,578
• D) $20,343

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Definitions:

Autonomy

The ability or right to make one's own decisions without interference from others.

Organizational Behavior

The study of how individuals and groups interact within an organization and how this affects the organization’s performance.

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An inclination of the mind to judge a particular thing with a level of preference or objection.

Short-term

Relating to or occurring over a brief period of time, typically less than a year, often used in financial, planning, or project contexts.