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

question 97

Multiple Choice

Clinton Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor costs.The following are the details of production during the year: $$\begin{array} { | l | r | } \hline \begin{array} { l } \text { Total manufacturing overhead costs estimated at the beginning } \\\text { of the year }\end{array} & \$ 140,000 \\\hline \text { Total direct labor costs estimated at the beginning of the year } & \$ 330,000 \\\hline \text { Total direct labor hours estimated at the beginning of the year } & 12,000 \text { direct labor hours } \\\hline \text { Actual manufacturing overhead costs for the year } & \$ 160,000 \\\hline \text { Actual direct labor costs for the year } & \$ 370,000 \\\hline \text { Actual direct labor hours for the year } & 11,800 \text { direct labor hours } \\\hline\end{array}$$
Calculate the amount of manufacturing overhead costs allocated to production.(Round any percentages to two decimal places and your final answer to the nearest dollar.)

• A) $140,000
• B) $179,394
• C) $156,954
• D) $160,000

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Definitions:

Materials Quantity Variance

The difference between the budgeted and actual quantities of materials used in production, affecting cost management.

Standard Cost

A predetermined cost of manufacturing, calculated based on the expected costs of material, labor, and overhead for a unit of product.

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost, reflecting changes in material prices.

Materials Quantity Variance

The difference between the expected amount of materials needed for production and the actual amount used.