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Jenny KANNEH
on Oct 11, 2024

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If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the predetermined overhead rate would be closest to:

A) $32.59 per DLH
B) $44.54 per DLH
C) $69.99 per DLH
D) $93.63 per DLH

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to assign overhead costs to products or job orders based on a relevant activity base such as machine hours or labor hours.

Direct Labor-Hours

The sum of all hours spent by workers who are directly engaged in manufacturing, used as a foundation for distributing labor expenses to products or services.

Traditional Costing

An accounting method that allocates manufacturing overhead costs to products based on volume-related measures, such as labor hours or machine hours.

  • Calculate predetermined overhead rates using traditional costing methods.
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Matthew MULLENGEROct 13, 2024
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