Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Kelsh company uses a predetermined overhead rate solve this question general Accounting

Kelsh Company uses a predetermined overhead rate based on machine hours to
apply to manufacturing overhead to jobs. The company has provided the following
estimated costs for next year:
Direct materials
Direct labor
Sales commissions
$10,000
$30,000
$40,000
Salary of production supervisor $20,000
Indirect materials
Advertising expense
$4,000
$8,000
$10,000
Rent on factory equipment
Kelsh estimates that 5,000 direct labor hours and 10,000 machine hours will be
worked during the year.
The predetermined overhead rate per hour will be:
A. $6.80
B. $6.40
C. $3.40
D. $8.20
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Transcribed Image Text:Kelsh Company uses a predetermined overhead rate based on machine hours to apply to manufacturing overhead to jobs. The company has provided the following estimated costs for next year: Direct materials Direct labor Sales commissions $10,000 $30,000 $40,000 Salary of production supervisor $20,000 Indirect materials Advertising expense $4,000 $8,000 $10,000 Rent on factory equipment Kelsh estimates that 5,000 direct labor hours and 10,000 machine hours will be worked during the year. The predetermined overhead rate per hour will be: A. $6.80 B. $6.40 C. $3.40 D. $8.20
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