Question
A manufacturer of chemicals shows the following budgeted costs for the next year: Direct Materials $8,000 Direct Labor $40,000 Rent on factory building $30,000 Depreciation
A manufacturer of chemicals shows the following budgeted costs for the next year:
| Direct Materials | $8,000 |
| Direct Labor | $40,000 |
| Rent on factory building | $30,000 |
| Depreciation on factory equipment | $16,000 |
| Rent on office building for accounting department | $20,000 |
| Company presidents salary | $200,000 |
The company uses machine hours as the allocation base for its manufacturing overhead (MOH). They estimate to run their machines for 20,000 hours next year. The predetermined (budgeted) manufacturing overhead rate will be:
A.
$4.70 / machine hour
B.
$3.30 / machine hour
C.
$2.30 / machine hour
D.
$5.70 / machine hour
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Advanced Accounting
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
12th edition
1305084853, 978-1305464803, 130546480X, 978-1305799448, 978-1305084858
