Manufacturing Overhead Applied on the Basis of Direct Labor-Hours Was

question 93

Multiple Choice

Manufacturing overhead applied on the basis of direct labor-hours was $120,000, while actual manufacturing overhead incurred was $124,000 for the month of April. Which of the following is always true given the statement above?

• A) Overhead was overapplied by $4,000.
• B) Overhead was underapplied by $4,000.
• C) Actual direct labor-hours exceeded budgeted direct labor-hours.
• D) Actual direct labor-hours were less than budgeted direct labor-hours.

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Definitions:

Normative Economics

An approach to economics that makes judgments about what the economy should be like or what particular policy actions should be recommended.

Behavior

The actions or reactions of an individual, group, or system in response to external or internal stimuli.

Zero Slope

A line with zero slope remains constant and horizontal, indicating no change in the dependent variable, regardless of changes in the independent variable.

Curve

In economics, it usually refers to a graphical representation of the relationship between two factors, such as supply and demand, price and quantity, etc.