Salge Inc Bases Its Manufacturing Overhead Budget on Budgeted Direct Labor-

question 22

Multiple Choice

Salge Inc. bases its manufacturing overhead budget on budgeted direct labor- hours. The variable overhead rate is $8.10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $74,730 per month, which includes depreciation of $20,670. All other fixed manufacturing overhead costs represent current cash flows. The direct labor budget indicates that 5,300 direct labor-hours will be required in September.
-The company recomputes its predetermined overhead rate every month.The predetermined overhead rate for September should be:

• A)$18.30
• B)$14.10
• C)$8.10
• D)$22.20

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