Felton Quality Productions Uses a Predetermined Overhead Allocation Rate Based

question 65

Multiple Choice

Felton Quality Productions uses a predetermined overhead allocation rate based on machine hours.It has provided the following information for the year: $$\begin{array} { | l | r | } \hline \text { Actual manufacturing overhead costs incurred } & \$ 100,000 \\\hline \text { Manufacturing overhead costs allocated to production } & \$ 46,000 \\\hline \text { Actual direct materials cost } & \$ 230,000 \\\hline \text { Actual direct labor cost } & \$ 50,000 \\\hline \text { Actual machine hours } & 32,000 \text { hours } \\\hline\end{array}$$
Based on the above information,calculate the predetermined overhead allocation rate applied by Felton Quality.(Round your answer to the nearest cent.)

• A) $1.44 per machine hour
• B) $3.13 per machine hour
• C) $7.19 per machine hour
• D) $1.56 per machine hour

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Definitions:

Temporary Differences

Differences between the carrying amount of assets or liabilities and their tax bases, which will result in taxable or deductible amounts in the future.

Permanent Differences

Permanent differences are disparities between taxable income and accounting income that arise from certain transactions and events, which will not reverse in the future.

Deferred Tax Assets

Future tax benefits arising from situations where the amount of taxes paid on financial statements exceeds the amount owed for tax purposes, which can be used to reduce future tax liability.

Deferred Tax Liabilities

Deferred tax liabilities are taxes that have been accrued but will not be paid for until a future date, typically due to timing differences between accounting and tax laws.