Roget Factory has budgeted factory overhead for the year at $15,500,000. It plans to produce 2,000,000 units of product. Budgeted direct labor hours are 1,050,000, and budgeted machine hours are 750,000. Using a single plantwide factory overhead rate based on direct labor hours, the factory overhead rate for the year is
A)$14.76
B)$20.67
C)$7.75
D)$77.50

Question

Quizplus · Accepted Answer

The factory overhead rate based on direct labor hours is calculated by dividing the total budgeted factory overhead by the total budgeted direct labor hours: $15,500,000 / 1,050,000 hours = $14.76 per direct labor hour.

Roget Factory Has Budgeted Factory Overhead for the Year at $15,500,000