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Austin Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $5,510,000 (290,000 hours at $19/hour) and that
Austin Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $5,510,000 (290,000 hours at $19/hour) and that factory overhead would be $1,590,000 for the current period. At the end of the period, the records show that there had been 270,000 hours of direct labor and $1,290,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate?
Anserws: $5.48, $5.53, $5.89, $5.12, $4.45
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