Question

1. USC Company has the following information available: Budgeted factory overhead $90,000 Actual factory overhead $80,000 Budgeted direct labor hours 20,000 Actual direct labor hours 21,000 Assume direct labor hours are the cost driver of factory overhead costs. The budgeted factory overhead rate is ________. A) $3.57 per direct labor hour B) $3.81 per direct labor hour C) $4.00 per direct labor hour D) $4.50 per direct labor hour

Answer 1

Answer:

D) $4.50 per direct labor hour

Explanation:

The computation of the budgeted factory overhead rate is shown below:

= Budgeted factory overhead cost  ÷ budgeted direct labor hours

= $90,000 ÷ 20,000

= $4.5 per direct labor hour

We simply divide the Budgeted factory overhead by the  Budgeted direct labor hours so that the accurate rate can come.

All other information which is given is not relevant. Hence, ignored it