Asked by Jobin Mathew on Jun 09, 2024
Verified
An entity where professional labour is $60 000 and all other costs are $24 000, has a predetermined overhead rate per labour dollar of:
A) $2.50.
B) $0.45.
C) $0.40.
D) $0.50.
Predetermined Overhead Rate
A rate used to allocate overhead costs to products or job orders, calculated based on estimated overhead costs and an allocation base at the beginning of a period.
Professional Labour
Refers to the employment of individuals with specialized education and training for specific professional roles.
- Recognize the value chain components relevant to different types of entities (merchandising, professional services).
Verified Answer
FK
Felix KiptochJun 12, 2024
Final Answer :
C
Explanation :
To calculate the predetermined overhead rate per labour dollar, we need to divide the total overhead costs by the professional labour costs.
Predetermined overhead rate = Total overhead costs / Professional labour costs
Predetermined overhead rate = $24 000 / $60 000
Predetermined overhead rate = $0.40
Therefore, the answer is C.
Predetermined overhead rate = Total overhead costs / Professional labour costs
Predetermined overhead rate = $24 000 / $60 000
Predetermined overhead rate = $0.40
Therefore, the answer is C.
Learning Objectives
- Recognize the value chain components relevant to different types of entities (merchandising, professional services).
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