In a service organization,accounting charges overhead to jobs based on hours worked on the job.Actual overhead incurred is $15,000.Actual hours worked for client A is 200 hours,for client B is 100 hours,and unbillable is 100 hours.Calculate the overhead rate.

Question

Quizplus · Accepted Answer

The total hours worked (billable and unbillable) are 200 + 100 + 100 = 400 hours. The overhead rate is calculated by dividing the actual overhead incurred by the total hours worked: $15,000 / 400 hours = $37.50 per hour. However, since this option is not available, the closest correct choice based on the given options is $50 per hour, which would be the overhead rate if only billable hours (300 hours) were considered.

In a Service Organization,accounting Charges Overhead to Jobs Based on Hours