Figure 5-7 The following information is available pertaining to the Production Division of Clarkson Enterprises:
Refer to Figure 5-7. What is the plantwide overhead rate based on direct labor hours?
A) $1.00
B) $1.50
C) $3.00
D) $9.00

Question

Figure 5-7 The following information is available pertaining to the Production Division of Clarkson Enterprises:
 Refer to Figure 5-7. What is the plantwide overhead rate based on direct labor hours?
A) $1.00 
B) $1.50 
C) $3.00 
D) $9.00

Quizplus · Accepted Answer

The plantwide overhead rate is calculated by dividing the total budgeted overhead costs by the total budgeted direct labor hours. Therefore, the plantwide overhead rate is $360,000 / 120,000 direct labor hours = $3.00 per direct labor hour.

Figure 5-7 the Following Information Is Available Pertaining to the Production