A single indirect-cost rate based on direct manufacturing labour-hours for the entire plant is:
$$\begin{array} { l c c c }
& \text { Machining } & { \text { Assembly } } \
\text { Direct manufacturing labour-hours } & 15000 & 75000 & \
\text { Machine-hours } & 60000 & 30000 & \
\text { Manufacturing overhead } & \$ 300000 & { \$ 600000 }
\end{array}$$

Question

A single indirect-cost rate based on direct manufacturing labour-hours for the entire plant is:
$$\begin{array} { l c c c } 
& \text { Machining } & { \text { Assembly } } \
\text { Direct manufacturing labour-hours } & 15000 & 75000 & \
\text { Machine-hours } & 60000 & 30000 & \
\text { Manufacturing overhead } & \$ 300000 &  { \$ 600000 }
\end{array}$$

Quizplus · Accepted Answer

The question states that the indirect-cost rate is based on direct manufacturing labour-hours for the entire plant. Therefore, we need to divide the total indirect costs by the total direct manufacturing labour-hours to get the indirect-cost rate per hour. We do not have information on the actual indirect costs, but we can assume that they are spread evenly across the entire plant. Based on the options given, the best choice for an indirect-cost rate would be $10 per direct labour-hour.

A Single Indirect-Cost Rate Based on Direct Manufacturing Labour-Hours for the Entire