An entity where professional labour is $60 000 and all other costs are $24 000, has a predetermined overhead rate per labour dollar of:
A) $2.50.
B) $0.45.
C) $0.40.
D) $0.50.

Question

Quizplus · Accepted Answer

To calculate the predetermined overhead rate per labour dollar, we need to divide the total overhead costs by the professional labour costs. 
Predetermined overhead rate = Total overhead costs / Professional labour costs
Predetermined overhead rate = $24 000 / $60 000
Predetermined overhead rate = $0.40
Therefore, the answer is C.

An Entity Where Professional Labour Is $60 000 and All