Jameson Company Uses a Predetermined Overhead Rate Based on Direct

question 22

Multiple Choice

Jameson Company uses a predetermined overhead rate based on direct Labour hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for the next year: $\begin{array}{lrr} \text { Direct materials } &£ 5,000 \\ \text { Direct Labour } &19,000\\ \text { Rent on factory building } &16,000\\ \text { Sales salaries } &24,000\\ \text {Depreciation on factory equipment } &7,000\\ \text { Indirect Labour } &11,000\\ \text {Production supenisor's salary } &14,000\end{array}$


Jameson estimates that 24,000 direct Labour hours will be worked during the year. The predetermined overhead rate per hour will be:

• A)£2.00
• B)£2.79
• C)£3.00
• D)£4.00

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Definitions:

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