Nexus Corporation Uses a Predetermined Overhead Rate Based on Direct

question 141

Multiple Choice

Nexus Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. Last year, the company's estimated manufacturing overhead was $1,200,000 and its estimated level of activity was 50,000 direct labor-hours. The company's direct labor wage rate is $12 per hour. Actual manufacturing overhead amounted to $1,240,000, with actual direct labor cost of $650,000. For the year, manufacturing overhead was:

• A) overapplied by $60,000.
• B) underapplied by $60,000.
• C) overapplied by $40,000.
• D) underapplied by $44,000.

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Definitions:

Kuder-Richardson

A method of calculating internal consistency by using all the possible split-half combinations. This is done by correlating the scores for each item on the test with the total score on the test and finding the average correlation for all of the items.

Americans with Disabilities Act

A civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life.

Accommodations

Adjustments made in educational or workplace settings to support the needs of individuals with disabilities or specific challenges.

Internal Consistency

Internal consistency measures the reliability of a test based on the correlations between different items on the same test.