Sirmons Corporation Bases Its Predetermined Overhead Rate on the Estimated

question 129

Multiple Choice

Sirmons Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labor-hours for the upcoming year at 70,000 labor-hours. The estimated variable manufacturing overhead was $9.93 per labor-hour and the estimated total fixed manufacturing overhead was $1,649,200. The actual labor-hours for the year turned out to be 74,000 labor-hours. The predetermined overhead rate for the recently completed year was closest to:

• A)$32.22
• B)$9.93
• C)$33.49
• D)$23.56

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