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Multiple Choice QuestionLanden Company uses a single plantwide overhead rate based on direct labor hours. Total budgeted overhead costs are $200,000. Total budgeted direct materials are $50,000 and total budgeted direct labor hours are 80,000. What is the plantwide overhead rate per direct labor hour?Multiple choice question.$2.50$4.00$0.40$0.25

Question

Multiple Choice QuestionLanden Company uses a single plantwide overhead rate based on direct labor hours. Total budgeted overhead costs are 200,000.Totalbudgeteddirectmaterialsare200,000. Total budgeted direct materials are 50,000 and total budgeted direct labor hours are 80,000. What is the plantwide overhead rate per direct labor hour?Multiple choice question.2.502.504.000.400.400.25

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Solution

To calculate the plantwide overhead rate per direct labor hour, you need to divide the total budgeted overhead costs by the total budgeted direct labor hours.

Here's the step-by-step calculation:

  1. Identify the total budgeted overhead costs: $200,000
  2. Identify the total budgeted direct labor hours: 80,000 hours
  3. Divide the total budgeted overhead costs by the total budgeted direct labor hours: 200,000/80,000hours=200,000 / 80,000 hours = 2.50

So, the plantwide overhead rate per direct labor hour is $2.50.

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