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Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs
Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year:
Direct materials | $ 6,000 |
---|---|
Direct labor | $ 20,000 |
Rent on factory building | $ 15,000 |
Sales salaries | $ 25,000 |
Depreciation on factory equipment | $ 8,000 |
Indirect labor | $ 12,000 |
Production supervisor's salary | $ 15,000 |
Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be:
Multiple Choice
A. $2.50 per direct labor-hour
B. $2.79 per direct labor-hour
C. $3.00 per direct labor-hour
D. $4.00 per direct labor-hour
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