What is the overhead applied rate if the driver is direct labour hours (please assume 4000 estimated direct labour hours)?
A) $3.50
B) $3.00
C) $4.50
D) $4.00

Question

Quizplus · Accepted Answer

The formula for calculating the overhead rate when using direct labor hours as the driver is:
Total estimated overhead cost / Total estimated direct labor hours
Assuming the overhead cost is $18,000, we can calculate the overhead rate as:
$18,000 / 4,000 direct labour hours = $4.50 per direct labour hour
Therefore, choice C is the correct answer.

What Is the Overhead Applied Rate If the Driver Is