An Organisation's Accountant Is Estimating Next Period's Total Overhead Costs

question 31

Multiple Choice

An organisation's accountant is estimating next period's total overhead costs. She performed two regression analyses, one based on direct labour hours and the other based upon machine hours. The results were: Total overhead = $150,000 + $4 x direct labour hours
Adjusted R-square = 0.83
Total overhead = $130,000 + $5 x machine hours
Adjusted R-square = 0.77
For the next period the accountant anticipates using 28,000 direct labour hours and 26,000 machine hours. Based upon this information, what is the best estimate for overhead for the next period?

• A) $262,000
• B) $260,000
• C) $254,000
• D) $270,000

Identify gender-specific communication styles and their implications for workplace interactions.

Identify the classification of different cash flows as operating, investing, or financing activities.

Recognize the reporting requirements for noncash investing and financing activities.

Comprehend the importance of cash flow information for decision-making by internal and external users.

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Definitions:

Subsidiary Ledger

A secondary ledger that provides detailed information to support accounts listed in the general ledger, such as customer or vendor details.

Revenue Journal

An accounting ledger that records incoming revenue transactions or sales made by a company.

General Ledger

A complete ledger detailing every fiscal activity during the lifespan of a business.

Transaction Errors

Mistakes or inaccuracies occurring in the recording, processing, or reporting of financial transactions.