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Rhett Company has two departments, Machining and Assembly. The following estimates are for the coming year: Machining Assembly Direct manufacturing labor-hours 10,000 50,000 Machine-hours 40,000
Rhett Company has two departments, Machining and Assembly. The following estimates are for the coming year:
Machining | Assembly | |
Direct manufacturing labor-hours | 10,000 | 50,000 |
Machine-hours | 40,000 | 20,000 |
Manufacturing overhead | $200,000 | $400,000 |
A single indirect-cost rate based on direct manufacturing labor-hours for the entire plant is:
a. $ 8 per direct labor-hour
b. $10 per direct labor-hour
c. $20 per direct labor-hour
d. None of these answers is correct.
Can you please explain your answer?
Thank you,
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