The Following Data Relates to Lead Company's Estimated Amounts for Next

question 145

Multiple Choice

The following data relates to Lead Company's estimated amounts for next year.
$$\begin{array} { l c c } \text { Estimated: } & \text { Department 1 } & \text { Departnent } 2 \\\text { Manufacturing overhead costs } & \$ 1,200,000 & \$ 3,400,000 \\\text { Direct labor hours } & 560,000 \mathrm { DLH } & 780,000 \mathrm { DLH } \\\text { Machine hours } & 91,000 \mathrm { MH } & 23,000 \mathrm { MH }\end{array}$$
What is the company's plantwide overhead rate if direct labor hours are the allocation base?
(Round to two decimal places)

• A) $3.43 per direct labor hour.
• B) $2.14 per direct labor hour.
• C) $4.36 per direct labor hour.
• D) $.29 per direct labor hour.
• E) $.47 per direct labor hour.

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Definitions:

Objective Statistical Procedures

Quantitative methods used to analyze data and make decisions based on statistical evidence rather than subjective judgment.

Intuition

The ability to understand something instinctively, without the need for conscious reasoning.

Optimizing

Optimizing involves making the best or most effective use of a situation or resource, often by balancing different factors or constraints.

Herbert Simon

An American economist, political scientist, and cognitive psychologist known for his contributions to decision-making processes and artificial intelligence.