Company, Inc

question 173

Multiple Choice

Company, Inc. applies overhead on the basis of direct labour hours. At the beginning of the year, Company, Inc. estimates overhead to be $540,000, machine hours to be 150,000, and direct labour hours to be 90,000. During January, Company, Inc. has 8,000 direct labour hours and 12,000 machine hours.
-Refer to the Figure.What is the predetermined overhead rate?

• A)$4 per machine hour
• B)$6 per direct labour hour
• C)$40,200
• D)$44,000

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Definitions:

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