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Managerial Accounting

07. Coolidge Company estimates that its production workers will work 125,000 direct labor hours during the upcoming period and that overhead costs will amount to $500,000. What predetermined overhead rate would be used to apply overhead to production during the period?
A) $0.25 per direct labor hour
B) $4.00 per direct labor hour
C) $0.25 per unit
D) $4.00 per unit

08. Cleveland Company's predetermined overhead rate is $2.00 per direct labor hour. Which of the following equations correctly computes the amount of overhead cost that should be applied to work in process assuming a job required 100 actual hours to complete but was estimated to require 90 hours?
A) 90 hours x $2 = $180
B) 100 hours x $2 = $200
C) 1 job x $2 = $2
D) none of the above

09. McKinley Industries estimated manufacturing overhead for the year at $290,000. Manufacturing overhead for the year was underapplied by $10,000. The company applied $235,000 to work in process. The amount of actual overhead would have been
A) $235,000.
B) $225,000.
C) $245,000.
D) none of the above.

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7. Predetermined overhead rate = estimated overhead/estimated direct labor hours = ...

Solution Summary

The solution has explanations for mutliple choice questions relating to overhead.