Gallucci Incorporated makes a single product-a critical part used in commercial airline seats. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The predetermined overhead rate is closest to:
A) $7.53 per labor-hour
B) $7.85 per labor-hour
C) $14.31 per labor-hour
D) $14.92 per labor-hour

Question

Gallucci Incorporated makes a single product-a critical part used in commercial airline seats. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:  The predetermined overhead rate is closest to:
A) $7.53 per labor-hour 
B) $7.85 per labor-hour 
C) $14.31 per labor-hour 
D) $14.92 per labor-hour

Quizplus · Accepted Answer

Predetermined overhead rate = $500,745/66,500 labor-hours = $7.53 per labor-hour

Gallucci Incorporated Makes a Single Product-A Critical Part Used in Commercial