Question
Q3.Silver Corporation uses a POH (predetermined overhead) rate based on DL (direct labor-hours) to apply MOH (manufacturing overhead) to jobs. The Corporation has provided the
Q3.Silver Corporation uses a POH (predetermined overhead) rate based on DL (direct labor-hours) to apply MOH (manufacturing overhead) to jobs. The Corporation has provided the following estimated costs for the next year: [1 Mark]
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 | $ 25,000 |
Silver Corp. estimates that 20,000 DL (direct labor-hours) will be worked during the year. The POR (predetermined overhead rate) per hour will be:
- $2.50 per DL (direct labor-hour)
- $2.79 per DL (direct labor-hour)
- $3.00 per DL (direct labor-hour)
- $4.00 per DL (direct labor-hour)
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