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The Following Information Is Available Pertaining to the Production Division

Question 134

Multiple Choice

The following information is available pertaining to the Production Division of Clarkson Enterprises:  Assembly Dept.  Finishing Dept.  Total  Overhead costs $7,500$22,500$30,000 Direct labor hours 7,5002,50010,000 Machine hours 2,5007,50010,000\begin{array} { l c c c } & \text { Assembly Dept. } & \text { Finishing Dept. } & \text { Total } \\ \text { Overhead costs } & \$ 7,500 & \$ 22,500 & \$ 30,000 \\ \text { Direct labor hours } & 7,500 & 2,500 & 10,000 \\ \text { Machine hours } & 2,500 & 7,500 & 10,000 \end{array}
Production information pertaining to Job 4X5:
 Assembly Dept.  Finishing Dept.  Total  Prime costs $1,250$0$1,250 Direct labor hours 2500250 Machine hours 000 Units produced 5000500\begin{array}{lrrr}&\text { Assembly Dept. }& \text { Finishing Dept. } &\text { Total }\\\text { Prime costs } & \$ 1,250 & \$ 0 & \$ 1,250 \\\text { Direct labor hours } & 250 & 0 & 250 \\\text { Machine hours } & 0 & 0 & 0\\\text { Units produced }&500&0&500\end{array}
What is the plantwide overhead rate based on direct labor hours?


A) $1.00
B) $1.50
C) $3.00
D) $9.00

Correct Answer:

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