Davie Corporation Is Preparing Its Manufacturing Overhead Budget for the Fourth

question 81

Multiple Choice

Davie Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable factory overhead rate is $6.00 per direct labor-hour; the budgeted fixed factory overhead is $92,000 per month, of which $16,000 is factory depreciation.
-If the budgeted direct labor time for December is 4,000 hours, then the predetermined factory overhead per direct labor-hour for December would be:

• A) $6.00
• B) $29.00
• C) $25.00
• D) $10.00

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Definitions:

Variance

A calculation of how spread out a data set is, determined by the mean of the squared deviations from the average.

Least Squares Estimates

A statistical method used to determine the line of best fit by minimizing the sum of squares of the errors between observed and predicted values.

Slope

In mathematics and statistics, it represents the rate at which a line inclines or declines, showing the change in the dependent variable for a unit change in the independent variable.

Y-Intercept

The location at which a line or curve crosses the y-axis in a coordinate system.