Rams Company had the following information: $$\begin{array} { l r }
\text { Budgeted factory overhead } & \$ 90,000 \
\text { Actual factory overhead } & \$ 107,000 \
\text { Budgeted: Direct-labor costs } & \$ 100,000 \
\text { Actual: Direct-labor costs } & \$ 107,000
\end{array}$$ The budgeted factory-overhead rate using direct-labor costs as the cost driver is _____.
A)$.81
B)$.90
C)$1.00
D)$1.05

Question

Rams Company had the following information: $$\begin{array} { l r } 
\text { Budgeted factory overhead } & \$ 90,000 \
\text { Actual factory overhead } & \$ 107,000 \
\text { Budgeted: Direct-labor costs } & \$ 100,000 \
\text { Actual: Direct-labor costs } & \$ 107,000
\end{array}$$ The budgeted factory-overhead rate using direct-labor costs as the cost driver is _____.
A)$.81
B)$.90
C)$1.00
D)$1.05

Quizplus · Accepted Answer

The budgeted factory-overhead rate is calculated by dividing the budgeted factory overhead by the budgeted direct-labor costs. In this case, the budgeted factory overhead is $90,000 and the budgeted direct-labor costs are $100,000. Therefore, the budgeted factory-overhead rate is $90,000 / $100,000 = $0.90.

Rams Company Had the Following Information The Budgeted Factory-Overhead Rate Using Direct-Labor Costs as the Cost