Aspen Technologies has the following budget data:? $$\begin{array} { l r }
\text { Estimated direct labor hours } & 15,000 \
\text { Estimated direct labor dollars } & \$ 90,000 \
\text { Estimated factory overhead costs } & \$ 198,000
\end{array}$$ If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is
A) $7.50
B) $13.20
C) $2.20
D) $16.50

Question

Aspen Technologies has the following budget data:? $$\begin{array} { l r } 
\text { Estimated direct labor hours } & 15,000 \
\text { Estimated direct labor dollars } & \$ 90,000 \
\text { Estimated factory overhead costs } & \$ 198,000
\end{array}$$ If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is
A) $7.50
B) $13.20
C) $2.20
D) $16.50

Quizplus · Accepted Answer

The predetermined overhead rate based on direct labor hours is calculated by dividing the estimated factory overhead costs by the estimated direct labor hours: $198,000 / 15,000 hours = $13.20 per hour.

Aspen Technologies Has the Following Budget Data If Factory Overhead Is to Be Applied Based on Direct