Use the following information for the next 5 questions.
The managers at Ithaca Manufacturing are discussing ways to allocate the cost of support departments such as Quality Control and Maintenance to the operating departments. To aid them in this discussion, the controller has provided the following information.
-(CMA) If Ithica Manufacturing decides not to allocate support costs to the operating departments, the overhead allocated to each direct labor hour in the Assembly Department would be
A) $3.20
B) $3.50
C) $12.00
D) $16.00

Question

Use the following information for the next 5 questions.
The managers at Ithaca Manufacturing are discussing ways to allocate the cost of support departments such as Quality Control and Maintenance to the operating departments. To aid them in this discussion, the controller has provided the following information. 
-(CMA) If Ithica Manufacturing decides not to allocate support costs to the operating departments, the overhead allocated to each direct labor hour in the Assembly Department would be
A) $3.20 
B) $3.50 
C) $12.00 
D) $16.00

Quizplus · Accepted Answer

If support costs are not allocated, the overhead rate is calculated by dividing the total overhead costs by the total direct labor hours in the Assembly Department. The problem states that the overhead allocated per direct labor hour is $12.00.

Use the Following Information for the Next 5 Questions