Answer the following questions using the information below:
Sky High Company has two departments, X and Y. The following estimates are for the coming year:
$\begin{array}{lrr}&X&Y\
\text { Direct manufacturing labor-hours } & 20,000 & 40,000 \
\text { Machine-hours } & 40,000 & 20,000 \
\text { Manufacturing overhead } & \$ 200,000 & \$ 400,000
\end{array}$
-A single indirect-cost rate based on direct manufacturing labor-hours for the entire plant is ________.
A) $15 per direct labor-hour
B) $10 per direct labor-hour
C) $21 per direct labor-hour
D) $12 per direct labor-hour

Question

Answer the following questions using the information below:
Sky High Company has two departments, X and Y. The following estimates are for the coming year:
 $\begin{array}{lrr}&X&Y\
\text { Direct manufacturing labor-hours } & 20,000 & 40,000 \
\text { Machine-hours } & 40,000 & 20,000 \
\text { Manufacturing overhead } & \$ 200,000 & \$ 400,000
\end{array}$
-A single indirect-cost rate based on direct manufacturing labor-hours for the entire plant is ________.
A) $15 per direct labor-hour
B) $10 per direct labor-hour
C) $21 per direct labor-hour
D) $12 per direct labor-hour

Quizplus · Accepted Answer

The total manufacturing overhead is $600,000 ($200,000 + $400,000) and the total direct manufacturing labor-hours are 60,000 (20,000 + 40,000). The indirect-cost rate is $600,000 / 60,000 hours = $10 per direct labor-hour.

Answer the Following Questions Using the Information Below: Sky High

Answer the Following Questions Using the Information Below:
Sky High