If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the predetermined overhead rate would be closest to:
A)$71.29 per DLH
B)$13.64 per DLH
C)$87.80 per DLH
D)$41.92 per DLH

Question

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $368,750 ÷ 4,200 DLHs = $87.80 per DLH (rounded)

If the Company Allocates All of Its Overhead Based on Direct