Asked by
Veeda Shaygan
on Oct 15, 2024Verified
Dallas Company uses a job order costing system.The company's executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period.At the end of the period,the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs.Using direct labor hours as a base,what was the predetermined overhead rate?
A) $6.00 per direct labor hour.
B) $7.50 per direct labor hour.
C) $6.67 per direct labor hour.
D) $8.33 per direct labor hour.
E) $7.08 per direct labor hour.
Direct Labor Hours
The total hours worked by employees directly involved in the production process, used as a measure for allocating labor costs to products or services.
Factory Overhead
All indirect costs associated with the production process, such as utilities, maintenance, and salaries for managers.
- Compute pre-established overhead rates and comprehend their usage.
Verified Answer
IB
Learning Objectives
- Compute pre-established overhead rates and comprehend their usage.
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