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Aztec Builders allocates manufacturing overhead to jobs based on machine hours. The company has the following estimated costs for the upcoming year:
Direct materials used $25,000Direct labour costs $62,000Salary of factory supervisor $49,000Advertising expense $33,000Heating and lighting costs for factory $11,000Depreciation on factory equipment $19,200Sales commissions $8,000
Problem 1: The firm estimates that 1,800 direct labour hours will be worked in the upcoming year, while 792 machine hours will be used during the year. The predetermined indirect allocation rate per machine hour is closest to
a. $56.b. $36.c. $100.d. $45.e. $40.
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