Harrell Company Uses a Predetermined Overhead Rate Based on Direct

question 98

Multiple Choice

Harrell Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated its total manufacturing overhead cost at $400,000 and its direct labour-hours at 100,000 hours. The actual overhead cost incurred during the year was $350,000 and the actual direct labour hours incurred on jobs during the year was 90,000 hours. The manufacturing overhead for the year would be?

• A)$50,000 overapplied.
• B)$50,000 underapplied.
• C)$10,000 overapplied.
• D)$10,000 underapplied.

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Definitions:

Federal Trade Commission

A U.S. federal agency tasked with consumer protection and the prevention of anti-competitive business practices.

Sherman Act

A landmark federal statute in the antitrust law of the United States, passed in 1890, which prohibits monopolistic practices and promotes competition.

Justice Department

A government department responsible for the enforcement of the law and administration of justice, primarily at a federal level.

American Hospital Supply

A company that historically specialized in supplying products and services to hospitals and healthcare facilities.