Q-dot Manufacturing uses a predetermined overhead allocation rate based on direc

Question

Q-dot Manufacturing uses a predetermined overhead allocation rate based on direct labor hours. It has provided the following information for the year: Manufacturing overhead costs allocated to production Actual direct materials cost Actual direct labor cost Actual direct labor hours Estimated machine hours $185,000 $540,000 $2,460,000 9,490 direct labor hours 80,000 machine hours Based on the above information, calculate Q- dot's predetermined overhead allocation rate. (Round your answer to two decimal places.) O A. $1.03 per machine hour O B. $19.49 per direct labor hour O c. 34.26% of direct materials cost O D. 7.52% of direct labor cost

Explanation / Answer

Predetermined overhead allocation rate = Manufacturing overhead cost allocated/Actual direct labor hours = 185000/9490= $19.49 per direct labor hour Option B is correct

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