The Equinox Fabrication Plant suffered a fire incident in August, and most of th

Question

The Equinox Fabrication Plant suffered a fire incident in August, and most of the records for the year were destroyed. The following accounting data for the year were recovered Total manufacturing overhead estimated at the beginning of the Total direct labor costs estimated at the beginning of the year Total direct labor hours estimated at the beginning of the year Actual manufacturing overhead costs for the year Actual direct labor costs for the year Actual direct labor hours for the year $106,880 $186.000 3,500 direct labor hours $99.300 $140,000 2,700 direct labor hours The company bases its manufacturing overhead allocation on the number of direct labor hours. What was the predetermined overhead allocation rate for the year? (Round your answer to the nearest cent.) O A. $68.80 OB. $1.87 OC. S39.21 O D. $30.25

Explanation / Answer

Q1 Total Manufacturing OH 105880 Direct Labor Cost 186000 Direct Labor Hours 3500 Predeterined OH Rate: Total Manufacturing OH 105880 A Direct Labor Hours 3500 B Predeterined OH Rate 30.25 A/B Answer is D $30.25/- Q2 Predeterined OH Rate 45.00 Per MH A Machine Hours Used 10.00 B Allocated OH 450 A*B Answer is A $450/- Q3 Division A Division B Total Manufacturing OH 160000 340000 A Division Base MH DLH Estimated Base 35000 20000 B Predeterined OH Rate 4.57 17.00 A/B Answer is C: Division A-$4.57 and Division B-$17.00

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