Question
Caines Company has the following estimated costs for next year: Direct materials $80,000 Indirect materials 8,000 Rent on factory equipment 20,000 Direct labor 35,000 Salary
Caines Company has the following estimated costs for next year:
Direct materials $80,000
Indirect materials 8,000
Rent on factory equipment 20,000
Direct labor 35,000
Salary of production supervisor 60,000
Sales commissions 25,000
Depreciation on factory building 50,000
Advertising expense 40,000
Factory utilities 10,000
Caines estimates that 10,000 machine hours will be worked during the year. The overhead rate per machine
hour will be (Hint: Choose which of the above costs are Overhead costs, add them together, and divide the total by 10,000):
a. $14.80 c. $13.80
b. $8.80 d. $14.00
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