Paul Company Used a Predetermined Overhead Rate During the Year

question 77

Multiple Choice

Paul Company used a predetermined overhead rate during the year just completed of $3.50 per direct labour hour, based on an estimate of 22,000 direct labour hours to be worked during the year. Actual overhead cost and activity during the year were: $$\begin{array} { | l | l | } \hline \text { Actual manulacturing overhead cost incurred } & \$ 90,000 \\\hline \text { Actual direct labour hours worked } & 25,000 \\\hline\end{array}$$ The underapplied or overapplied overhead for the year was:

• A)$2,500 underapplied.
• B)$13,000 underapplied.
• C)$2,500 overapplied.
• D)$10,500 overapplied.

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Definitions:

Negligently Left

implies a scenario where an item or individual is unintentionally left behind due to a lack of proper care or attention.

Banana Peel

Often used metaphorically to describe a potential hazard or slip-up that seems trivial but can lead to significant consequences.

Injured

The state of having received harm or damage, physically or legally, which may serve as a basis for seeking compensation or redress in a court of law.

Sued

The act of bringing a legal action against an individual or entity, seeking a legal remedy for damages or enforcement of rights.