A Company Allocates $7 A) 9,914 DLH

question 115

Multiple Choice

A company allocates $7.50 overhead to each unit produced. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many direct labor hours does the company expect in department 2?
$$\begin{array} { l c c } \text { Estimated: } & \text { Department 1 } & \text { Department 2 } \\\text { Manufacturing overhead costs } & \$ 74,358 & \$ 49,572 \\\text { Direct labor hours } & 6,610 \mathrm { DLH } & ? \mathrm { DLH } \\\text { Machine hours } & 700 \mathrm { MH } & 800 \mathrm { MH }\end{array}$$

• A) 9,914 DLH.
• B) 6,612 DLH.
• C) 3,109 DLH.
• D) 7,454 DLH.
• E) 16,254 DLH.

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Definitions:

Tariff Exemption

A waiver of customs duties typically levied on imported goods, often granted to promote trade or address specific economic needs.

Cereals

Grasses cultivated for the edible components of their grain, like wheat, maize, rice, and oats, which are a staple food in many cultures.

Protectionism

A call for tariffs and favourable treatments to protect domestic firms from foreign competition.

Foreign Competition

The presence of competitors from other countries in a domestic market, highlighting the global nature of the market and challenges for local firms.