The Following Information Is Provided by the Sutton Corporation for the Year

question 111

Multiple Choice

The following information is provided by the Sutton Corporation for the year: $$\begin{array} { l r } \text { Actual overhead } & \$ 450,000 \\\text { Actual machine hours worked } & 25,000 \\\text { Budgeted machine hours } & 27,500 \\\text { Applied overhead } & \$ 487,500\end{array}$$
If normal costing is used, budgeted overhead used to calculate the predetermined rate would be

• A)$443,250.
• B)$450,000.
• C)$487,500.
• D)$536,250.

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Definitions:

Adjusting Entry

An accounting record made to adjust revenues and expenses to match the accounting period they were incurred, ensuring compliance with the accrual basis of accounting.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable, acknowledging potential losses on credit sales.

Carrying Amount

The book value of assets and liabilities as reported on the balance sheet, after deducting any accumulated depreciation or amortization.

Accounts Receivable

Receivables from clients for goods delivered or services performed by a company, awaiting payment.