Acme,Inchad Overhead of $310,000 During the Year When $260,000 in Labor

question 72

Multiple Choice

Acme,Inc.had overhead of $310,000 during the year when $260,000 in labor costs were incurred.Estimates at the start of the year for overhead and labor costs were $300,000 for overhead and $250,000 for labor costs.The predetermined overhead rate would be:

• A)101.67%.
• B)104.00%.
• C)120.00%.
• D)83.33%.

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Definitions:

Cash Budget

An estimate of cash inflows and outflows over a specific period, used to manage and plan for cash needs.

Minimum Cash Balance

The lowest amount of cash that a company aims to maintain in its accounts to adequately meet its operational and financial obligations.

Borrowing

The act of obtaining funds from a lender under the agreement to pay back the principal amount along with interest or other charges.

Inventory Levels

The quantities of goods and materials a company holds for the purpose of resale or production at any given point in time.