Question
The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,000 direct labor-hours will be required
The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,000 direct labor-hours will be required in May. The variable overhead rate is $8.70 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $130,900 per month, which includes depreciation of $24,860. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be:
Multiple Choice
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$8.70
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$27.40
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$23.90
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$18.70
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