Fortune Company Uses a Predetermined Overhead Rate Based on Direct

question 113

Multiple Choice

Fortune Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.
$\begin{array}{lrr}\text { On October } 1 \text {, the estimates for the month were: }\\ \text { Manufacturing overhead } &\$17,000\\ \text {Direct labor-hours } &13,600\\ \text {During October; the actual results were: } &\\ \text { Manufacturing overhead } &\$18,500\\ \text {Direct labor-hours } &12,000\\\end{array}$

The cost records for October will show:

• A) Overapplied overhead of $1,500.
• B) Underapplied overhead of $1,500.
• C) Overapplied overhead of $3,500.
• D) Underapplied overhead of $3,500.

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Definitions:

Hiring Employee

The process of finding, selecting, and appointing suitable candidates for jobs within an organization.

Signing Bonus

A one-time payment offered by employers to incentivize a candidate to accept a job offer.

Marginal Revenue Product

The extra income produced by using an additional unit of a resource.

Product Demand

The desire and willingness of a consumer to purchase a specific quantity of a product at a given price.