Case Company Allocates $5 A) 25,000 MH

question 53

Multiple Choice

Case Company allocates $5.00 overhead to each unit produced. The company uses a plantwide overhead rate with machine hours as the allocation base. Given the amounts below, how many machine hours does the company expect in department 2?
$$\begin{array} { l c c } \text { Estimated: } & \text { Department 1 } & \text { Department 2 } \\\text { Manufacturing overhead costs } & \$ 250,000 & \$ 150,000 \\\text { Direct labor hours } & 8,000 \mathrm { DLH } & 12,000 \mathrm { DLH } \\\text { Machine hours } & 55,000 \mathrm { MH } & ? \mathrm { MH }\end{array}$$

• A) 25,000 MH.
• B) 137,500 MH.
• C) 82,500 MH.
• D) 88,000 MH.
• E) 33,000 MH.

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Definitions:

Quick Ratio

A liquidity metric that assesses a company's ability to meet its short-term obligations with its most liquid assets.

Short-Term Marketable Securities

Financial instruments that can easily be converted into cash within a short period, typically less than one year.

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A comprehensive report on a company's activities, financial performance, and strategy, typically published yearly for shareholders.