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Management believes that indirect manufacturing costs

Question - A machine shop has direct materials cost of $1,800,000 direct labour of $4,200,000 (direct labour rate is $50 per hour) and budgeted indirect manufacturing costs of $850,000. Management believes that indirect manufacturing costs increase with direct labour hours. What is the budgeted indirect manufacturing cost rate?

a. $2.12

b. $4.94

c. $10.12

d. $2.33

e. $17.00

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Accounting Basics: Management believes that indirect manufacturing costs

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