Ridley Company Estimates That Overhead Costs for the Next Year

question 45

Multiple Choice

Ridley Company estimates that overhead costs for the next year will be $6,870,000 for indirect labor and $450,000 for factory utilities.The company uses machine hours as its overhead allocation base.If 160,000 machine hours are planned for this next year,what is the company's plantwide overhead rate?

• A) $.02186 per machine hour.
• B) $42.9375 per machine hour.
• C) $45.75 per machine hour.
• D) $2.8125 per machine hour.
• E) $.3555 per machine hour.

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