Use the Information Below to Answer the Following Question(s)

question 121

Multiple Choice

Use the information below to answer the following question(s) .
Zarvo Moldings allocates manufacturing overhead to jobs based on machine hours. The company has the following estimated costs for the upcoming year:
The company estimates that 1,800 direct labour hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year.
-At Zarvo Moldings the predetermined manufacturing overhead rate per direct labour hour is closest to

• A) $62.
• B) $39.
• C) $35.
• D) $111.

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Definitions:

Overhead Costs

Indirect costs of products or services.

Capacity-Sustaining Cost

Costs incurred to maintain the production capacity of a company at current levels, including costs for maintenance and repair of equipment.

Batch-Level Cost

Costs that are incurred as a result of producing a batch of products, rather than the production process as a whole.