Please provide detailed instructions. Thanks. Rosemary Corporation uses direct-l

Question

Please provide detailed instructions. Thanks.

Rosemary Corporation uses direct-labor hours to allocate their manufacturing overhead cost with capacity-based method. The following data is given Cost of idle capacity Estimated direct labor hours (expected usage) Estimated direct labor hours at capacity $100,000 20,000 25,000 If the company uses the traditional method (or absorption costing based method), how much would have been its predetermined overhead rate? A. $25.00 per DLH B. 20.00 per DLH C. 16.00 per DLH D. 5.00 per DLH

Explanation / Answer

Answer: Option [B] $20.00 Calculation: Predetermined OH rate = Cost of idle capacity/Idle capacity = 100000/(25000-20000) = $    20.00

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.