A Manufacturing Company Applies Overhead Based on Direct Labor Hours

question 111

Multiple Choice

A manufacturing company applies overhead based on direct labor hours. At the beginning of the year, it estimated that overhead costs would be $720,000 and direct labor hours would be 90,000. Actual overhead costs incurred were $754,400, and actual direct labor hours were 92,000. Compute the predetermined overhead rate per direct labor hour.

• A) $7.83
• B) $8.38
• C) $8.20
• D) $8.00

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