Question
company has the following estimated costs for 2014 Direct materials 25,000 Advertising expense 15,000 Rent on factory building 13,000 Rent on office building 8,000 Direct
- company has the following estimated costs for 2014
Direct materials 25,000
Advertising expense 15,000
Rent on factory building 13,000
Rent on office building 8,000
Direct labor 22,000
Depreciation on factory equipment 6,000
Indirect materials 10,000
Sales salaries 28,000
Insurance on factory equipment 12,000
Indirect labor 5,000
Property taxes on factory building 10,000
Property taxes on office building 10,000
company estimates that 32,000 direct labor hours and 20,000 machine hours will be worked during 2014. If overhead is applied on the basis of direct labor hours, the overhead application rate per hour will:
A. $2.35
C. $2.10
D. $1.40
E. $2.80
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