Chapter 17: Q14SE_a. (page 941)
Question: Using job order costing in a service company
Assume that Roth’s accountants are expected to work a total of 8,000 direct labor hours in 2018. Roth’s estimated total indirect costs are $96,000 and the allocation base used is direct labor hours.
Requirements
1. What is Roth’s predetermined overhead allocation rate?
Short Answer
Answer:
The predetermined overhead allocation rate of the company is $12.