The Predetermined Manufacturing Overhead Rate for the Year Was $14

question 112

Multiple Choice

The predetermined manufacturing overhead rate for the year was $14.00 per direct labor hour; employees were paid $17.50 per hour. If the estimated direct labor cost was $315,000, what was the estimated manufacturing overhead?

• A) $22,500.
• B) $90,000.
• C) $252,000.
• D) $393,750.

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Definitions:

Consolidation

The act of merging multiple entities into one, often to streamline operations and reduce costs, or in financial terms, combining financial statements of parent and subsidiary companies.

Subsidiary

A company that is controlled by another company, typically referred to as the parent company.

White Knight

When a firm is an acquisition target by an unattractive suitor, a more desirable acquirer is known as a white knight. (The original suitor may be known for particularly ruthless treatment of acquired companies.)

Tender Offers

A public proposal by a person or company inviting shareholders to sell their shares at a specified price.